COLUMBUS, Ohio, Dec. 18, 2015 /PRNewswire/ -- Today, Congress passed and the President is expected to sign the "Protecting Americans from Tax Hikes (PATH) Act of 2015." The passage of this legislation qualifies computer equipment and related technology and services as "qualified higher education expenses" when purchased for use primarily by the beneficiary of a 529 college savings plan during any years the beneficiary is enrolled at an eligible educational institution.
The Protecting Americans from Tax Hikes Act of 2015 was created to extend or permanently renew a variety of federal tax provisions, along with a number of new tax changes.
"For years, CollegeAdvantage, along with other 529 plans around the country, has lobbied legislators to establish the purchase of computers as a qualified 529 expense. This is truly a great gift and just in time for the holidays," said Tim Gorrell, executive director of the Ohio Tuition Trust Authority, which sponsors Ohio's CollegeAdvantage 529 college savings plans.
To clarify what this means for 529 plans, the new tax law does three things:
- It makes the purchase of laptops, computers, and related technology and services a qualified higher education expense – this change is retroactive for anyone who made a purchase of such items on January 1, 2015 or later.
- It allows the re-contribution of qualified withdrawals from a 529 plan that are later refunded by an eligible educational institution into a 529 plan without tax penalty – this too is retroactive for anyone who has received such a refund from a school January 1, 2015 or later.
- It updates the accounting rules for 529 plans to eliminate distribution aggregation, which eases burdensome recordkeeping requirements for plan administrators.
Additional information for CollegeAdvantage 529 Plan account owners is available at www.CollegeAdvantage.com/blog.
About the Ohio Tuition Trust Authority/CollegeAdvantage: CollegeAdvantage is Ohio's 529 college savings program, offered and administered by the Ohio Tuition Trust Authority, an office within the Ohio Department of Higher Education. Ohio is the fifth largest state sponsor of 529 plans in the country. CollegeAdvantage is offered as the CollegeAdvantage Direct 529 Savings Plan and the CollegeAdvantage Advisor 529 Saving Plan which is offered and marketed through BlackRock and sold through professional financial advisors. The CollegeAdvantage program, which offers families a tax-advantaged way to save for college, has nearly $9 billion in assets under management and over 638,000 total accounts as of September 30, 2015. To learn more, visit www.CollegeAdvantage.com.
SOURCE Ohio Tuition Trust Authority