Page 50 - AAA Magazine – AAA Ohio Auto Club – November 2018

529 College Savings Plans
Continued from page 47
country. More than 30 states offer some form of tax deduction for 529 plan contributions.
Earnings of 529 plans are exempt from federal tax and generally exempt from state tax when withdrawn, so long as they are used to pay for qualified education expenses of the plan beneficiary. If your child doesn’t want to go to college, you can change the beneficiary to another child in your family. You can even roll over distributions from a 529 plan into another 529 plan established for the same beneficiary, or another family member, without tax consequences.
Grandparents can start a 529 plan or other college savings vehicle just like parents can. In fact, anyone can set up a 529 plan on behalf of anyone. You can even establish one for yourself.
These plans now have greater flexibility. Thanks to the federal tax reforms passed in 2017, up to $10,000 of 529 plan funds per year may now be used to pay for qualifying K-12 tuition costs.
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48 | AAA MAGAZINE