Improvements for 529 plans with PATH Act of 2015

On December 18, 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which introduced improvements to 529 plans. Account owners are encouraged to see their tax advisor to understand the implications of these changes.

Computers
Previously, 529 rules treated a computer as a "qualified higher education expense" only if the beneficiary's college required a computer as a condition of enrollment. But now, under the new law, a computer, peripheral equipment, computer software, and Internet access or related services are considered qualified higher education expenses--as long as the computer, equipment, software, or services are used primarily by the beneficiary while enrolled in school. This change is retroactively effective for tax years beginning after December 31, 2014.

Re-contributions
When a beneficiary is given a refund of a qualified higher education expense from an eligible educational institution, account owners can now re-contribute that money into a 529 account for that beneficiary. Re-contributed refunds will not have taxes or penalties associated with them.

You must re-contribute a refund within 60 days of the beneficiary's receipt, and the re-contributed amount can't exceed the amount of the refund.

In addition a special transition rule permits refunds received after December 31, 2014 and before December 18, 2015 (the date the law was enacted) to be re-contributed by February 16, 2016 (60 days after the law was enacted) without incurring taxes or penalties.

It's the responsibility of the account owner to keep all records of refunds and re-contributions.

Quick Links

Ascensus Broker Dealer Services is the distributor of the North Dakota College SAVE plan, Learn more about Ascensus Broker Dealer Services, LLC on FINRA's BrokerCheck.

For more information about North Dakota's College SAVE Plan (College SAVE), call 1-866-SAVE-529 (1-866-728-3529) or click here to obtain a Plan Disclosure Statement. Investment objectives, risks, charges, expenses, and other important information are included in the Plan Disclosure Statement; read and consider it carefully before investing. Ascensus Broker Dealer Services, LLC (ABD) is Distributor of the College Save.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You should also consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 college savings plan(s), or any other 529 plan, to learn more about those plans’ features, benefits, and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

College SAVE is a 529 plan established by the State of North Dakota. Bank of North Dakota (Bank) acts as trustee of College SAVE Trust, a North Dakota Trust, and is responsible for administering College SAVE Trust and College SAVE. ABD, the Plan Manager, and its affiliates, have overall responsibility for the day-to-day operations of the Plan, including recordkeeping and marketing. The Vanguard Group, Inc. (Vanguard) provides underlying investments for the Plan. The College SAVE's Portfolios, although they invest in mutual funds, are not mutual funds. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns are not guaranteed and you could lose money by investing in College SAVE. Participants assume all investment risks, including the potential for loss of principal, as well as responsibility for any federal and state consequences.

Not FDIC Insured. No Bank, State or Federal Guarantee. May Lose Value.

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