On December 22, 2017, the president signed H.R. 1, the federal tax reform bill, into law. The law permits withdrawals from a 529 college savings account up to $10,000 per year per student for tuition expenses in connection with enrollment and attendance at an elementary or secondary public, private or religious school (K-12 tuition). The law also permits rollovers from a 529 college savings account to an ABLE plan account (ABLE plan rollover) up to the annual $15,000 contribution limit. We are working on updating our website to reflect the new U.S. tax law. In the meantime, please note the following:
- Account owners can withdraw assets to pay K-12 tuition and initiate an ABLE plan rollover. In each case, the withdrawals will be treated as qualified expenses for federal tax law purposes.
- Action by the Montana Legislature may be required to extend favorable Montana state tax treatment to withdrawals for K-12 tuition and/or ABLE plan rollovers taken from an Achieve Montana account. Additionally, if a distribution is not considered qualified for state tax purposes, it would trigger a recapture of previous state income tax deductions claimed under Montana law.
- Montana taxpayers should consult their tax advisors before making a contribution or withdrawal for K-12 tuition or initiating an ABLE plan rollover.
- We will provide more information as additional details about the effects of the new federal tax law on Montana state tax law become clear. In the meantime, we encourage you to consult a qualified tax advisor about your personal circumstances. Achieve Montana account owners in other states should seek guidance from the state in which they pay taxes.