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February 05, 2015 at 09:46 AM
The House plans to vote soon on one bill that would loosen some rules on 529 college savings plans and another that would allow small businesses to deduct their office equipment.
The House is scheduled to vote next week on H.R. 529, which was introduced by Reps. Lynn Jenkins, R-Kansas, and Ron Kind, D-Wis., and would “improve” 529 plans in three areas:
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including computers, Internet, and computer equipment used primarily by the beneficiary as qualified higher education expenses;
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eliminating all distribution aggregation requirements, even when multiple accounts exist in a 529 plan with the same owner and beneficiary; and
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allow account owners to redeposit contributions to a 529 plan within 60 days after the school issues a refund of qualified expenses due to the beneficiary’s withdrawal from school.
The Financial Services Institute applauded the two bills Thursday, stating that the 529 plan bill offers three “common-sense changes” to the accounts. Since being created by Congress in 1996, more than 10 million 529 college savings accounts have been opened, with savings in such plans reaching more than $225 billion.
By allowing computers to be qualified educational expenses, families could “use their savings to purchase an essential tool for today’s college student, thus reducing the burden being placed on a family’s pocketbook as a child begins his/her college experience.”
The bill also removes distribution aggregation requirements to modernize the treatment of 529 accounts, “thus simplifying the 529 process and reducing paperwork burdens,” FSI said.
