Below is a summary of the 2015 budget and legislation changes (both federal and state) affecting 529 plans, from the Wisconsin Department of Administration website:
- On 12/21/2015, federal 529 rules now permit the costs of any computers, related software, and internet services as qualified higher education expenses if primarily used by the student. This new law is retroactive to January 2015. Account owners seeking reimbursement for these now eligible 2015 expenses or for purchases made this month are reminded to submit withdrawal paperwork before December 31, 2015.
- In 2016, contributions by any Wisconsin adult reduce state-taxable income, dollar-for-dollar, up to $3,100 per beneficiary per year. This amount did not change from the deduction limit for 2015.
- Effective January 4, 2016, the Maximum Account Balance is increased to $440,300.
- A new rule affects contribution tax treatment when a withdrawal is made within a 365 day period. Please visit the Wisconsin 529 College Savings Program Website for more information.
- Incoming rollovers from other states' 529 plans continue to be accepted. The portion that is principal or contributions may qualify for reducing your Wisconsin taxable income, including carry-forward for subsequent years; the portion attributed to growth is not eligible. Amounts that received an earlier Wisconsin reduction are not eligible. * Effective January 4, 2016, the Maximum Account Balance is increased to $440,300.
For more information, please visit the Wisconsin 529 College Savings Program site. (Please note: You will be directed away from the Tomorrow’s Scholar site and to the Wisconsin Department of Administration website.)