backģ A donor may elect to treat a contribution to a beneficiary’s account as made ratably over a five-year period. In the case of a UGMA/UTMA 529 account, contributions by the parent/ guardian listed as the Custodian on the UGMA/UTMA Plan account are also eligible for a Nebraska state tax deduction. The minor must file a Nebraska tax return for the year their contributions are made to be eligible for a tax deduction for their own contributions. For a minor-owned or UGMA/UTMA 529 account, the minor is considered the account owner for Nebraska state income tax deduction purposes. Contributions in excess of $10,000 cannot be carried over to a future year. Please consult your tax professional about your particular situation.Ģ Account owners may deduct for Nebraska income tax purposes contributions they make to their own account (and any other accounts they own in the Nebraska Educational Savings Plan Trust) up to an overall maximum of $10,000 ($5,000 if married, filing separately). If a withdrawal is made for such purposes, although it is a Federal Qualified Withdrawal, it will be treated as a Nebraska Non-Qualified Withdrawal and may result in the recapture of a previously claimed Nebraska state income tax deduction, and the earnings portion will be subject to Nebraska state income tax. Nebraska law does not treat the following Federal Qualified Higher Education Expenses as Nebraska Qualified Expenses: K–12 Tuition Expenses. However, earnings on all other types of withdrawals are generally subject to federal and Nebraska state income taxes, and an additional 10% federal tax. Qualified higher education expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance certain room and board expenses incurred by students who are enrolled at least half-time the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution certain expenses for special needs services needed by a special needs beneficiary apprenticeship program expenses and payment of principal or interest on any qualified education loan of the Beneficiary or a sibling of the Beneficiary (up to an aggregate lifetime limit of $10,000 per individual). Please consult with your tax advisor for all the details.1 Withdrawals used to pay for qualified higher education expenses are free from federal and Nebraska state income tax. If you don’t currently have a Path2College 529 Plan, you may want to explore opening one. This is a great way for you to pay for your tuition and save federal taxes. Parents, Grandparents, or even your relatives and friends can have these plans. Your 529 Plan investments grow tax free, and withdrawals can be used to pay for tuition, and other charges considered to be eligible expenses at a private school. The “beneficiary” is the “student”, and the $10,000 limit is for students in grades K-12. ![]() middle school and high school) public, private, or religious school are Georgia and federal income tax free up to a maximum of $10,000 of distributions for such tuition expenses per taxable year per Beneficiary from all 529 plans”.įormerly these plans were for savings for college, but this year the law changed to include children in K-12 grade private schools. “Effective January 1, 2018, distributions for tuition in connection with enrollment or attendance at an elementary or secondary(i.e. Read Clark Howard's recommendation on his websiteįrom the State of Georgia website on the Path2College 529 Plan the following language was added:. ![]() ![]() The following is a link to Clark Howard’s website and information regarding 529 plans:
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