Before you make a contribution for a K-12 goal, consider the following:
Your contribution will be invested according to the allocation instructions on file for your account (Refer to “Change your Investment Options > Allocations for Future Contributions”). If you want to direct this contribution to a different investment option for your K-12 savings goal, you’ll first need to change your Allocations for Future Contributions, and then make the contribution.
Note: Federal law allows up to two investment allocation changes per calendar year. Changing investment allocations alters how future funds are invested within your account. You may want to consider opening a separate account for your K-12 savings goals where a different investment strategy could be chosen.
Please remember that certain investment options may be less suitable for short-term investment goals. The Age-Based options are designed to take into account a beneficiary’s age and the number of years until higher education, and are not designed for saving for K-12 tuition expenses. You should consider your investment time horizon before you select your investment options. Please see the Program Description for further information on the investment options.
Effective January 1, 2018 savings, up to $10,000 per tax year per beneficiary, in the aggregate from all 529 plan accounts held for the same beneficiary, may be withdrawn and used for expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school K-12 Tuition Expenses without incurring federal income tax on the earnings portion of the withdrawal.
Earnings on withdrawals of up to $10,000 per tax year per beneficiary from your IDeal account used for K-12 Tuition Expenses will also be free of Idaho state income tax. If you are not an Idaho taxpayer, the state(s) where you pay income tax may differ in its state income tax treatment of K-12 Tuition Expenses. It is the account owner’s responsibility to ensure that distributions for K-12 Tuition Expenses do not exceed the limit for a beneficiary. You should consult with a tax advisor regarding your individual situation.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.