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Half of States Allow 529 Savings for K-12 Tuition

By Net Assets posted 15 days ago

  

(from Education Next) As of the end of 2018, just over half of U.S. states have statutory provisions allowing the use of 529 savings accounts for K-12 private school tuition, but ambiguity in state laws is curbing widespread awareness of the option. Families have long used the accounts, named after section 529 of the Internal Revenue code, to save for college tuition and expenses without paying federal taxes on investment growth. Changes in last year's Tax Cuts and Jobs Act broadened the accounts' utility to K-12 tuition, and a growing list of state agencies have said that taxpayers can use their savings that way. Yet state code sometimes remains unchanged (for instance, referencing only "postsecondary education"). In other states, there is active opposition to the use of 529 funds for K-12. Oregon lawmakers, for instance, are using legislation to prevent families from taking advantage of this option.

There are some 12.5 million 529 accounts open in the U.S., totaling more than $304 billion in assets, according to the Investment Company Institute.

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