The 19/20 financial aid cycle is upon us and brings with it 529 college plans. New federal legislation makes it possible to use funds from a 529 college plan to pay tuition at private pk-12 schools. The limit is set at $10,000 per year per child.
In addition, the new tax law made it possible for individuals paying private tuition to deposit up to $10,000 in their 529 plan and immediately pull it out to pay tuition. In some states, doing so reduces taxable income by $10,000. State legislatures are reviewing measures to deal with the unintended consequence of the new tax law. The states did not intend for the 529 deposits to go in and out so quickly as a means of reducing taxable income.
Please use your school’s legal resources to explore your 529 College Plan options. These resources may include state/national school associations you subscribe to. TADS has enhanced the financial aid application for the 19/20 cycle to ask for the current value of the applicant 529 college plan. The answer to this question is “informational” only and found on TADS Detailed Summary Report as Excel Worksheet. Decisions on use of 529 funds for pk-12 tuition will fall to administrators in partnership with their applicants. TADS is unable to determine if an applicant has a 529 plan but does not report it to TADS.