On Thursday, the Arizona State Senate approved SB 1349, dubbed the Family College Savings Plan bill, in a vote along party lines. The bill, sponsored by Senator David Livingston, now goes to the Governor for his signature.
Arizona’s 529 plan allows parents and grandparents to save for educational expenses, in a tax deferred manner. Currently, the State only allows these funds to be used for higher education expenses. SB 1349 opens these funds to elementary and secondary education expenses.
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Federal law now permits tax-free rollovers from 529 plans to Achieving a Better Life Experience (ABLE) accounts, to fund expenses for disabled individuals. With SB 1349, Arizona would conform to this as well.
Senate Fact Sheet:
Provisions
1. Expands the definition of qualified withdrawal to include account withdrawals for tuition less than $10,000 to enroll in or attend an elementary or secondary public, private or religious school of the designated account beneficiary.
2. Expands the definition of qualified higher education expenses to include:
a) purchase of a computer, peripheral equipment, computer software, internet access and related services to be primarily used by the beneficiary when the beneficiary is enrolled at an eligible education institution and if the expenses meet the definition in section 529 of the IRC; and
b) tuition to enroll in or attend an elementary or secondary public, private or religious school.
3. Allows, through December 31, 2025, up to $15,000 of an account to roll over to an Achieving a Better Life Experience Act Account on direction of an account owner.
4. Modifies, from College Savings Plan to Family College Savings Program, the article heading for statutes relating to the Program.