Up until now, the 529 Plan has been a tax-advantaged approach for putting aside money for higher education, i.e., college. Funds placed in a 529 Plan grow federal tax-free, and further, were able to be withdrawn federal tax-free if used for qualified education expenses. Qualified expenses are generally tuition, fees, and other related expense, that are required for enrollment or/and attendance at an eligible educational institution.
The Tax Cuts and Jobs act signed into law last year has expanded the law to also allow federal tax-free distributions for payment of K-12 education. Unlike the college-level students, however, the law allows distributions of up to $10,000 per year, per eligible student, for tuition only.
To be certain that you comply with the new law, please consult an experienced tax advisor or attorney.
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