It’s very likely, according to some sources, that 529 plans will be impacted by changes in the law in the coming months. Among those changes are the great potential (included in the proposed stimulus plan) that you’ll soon be able to use your 529 plan proceeds to purchase computers and computing services – an option that formerly was only available in the Coverdell ESA plans. Keep in mind that the proposed stimulus plan only impacts this law for 2009 and 2010, currently.
As well, there may be provisions brought forth to expand the current Saver’s Credit to include contributions to 529 plans; a possible change to the number of times a year that you are allowed to make changes to your allocations in a 529 plan (already temporarily changed to twice a year for 2009 from the former once annually); and then the downside potential: it’s very possible that the provisions of 529 plans may become more strict, as there is a lot of possible revenue left on the table for the Treasury with the current rules.
Stay tuned!
I can learn from you, you can learn from me - please leave your comments and links!Jim Blankenship, CFP®, EA, is an expert in personal retirement, IRAs, and tax issues, with more than 20 years of experience in the industry. . Read more from this author
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