On December 22, 2017, the president signed new tax legislation into law. We're working on updating our website to reflect the new U.S. tax laws. In the meantime, the website may not address the changes.
The legislation includes the following several new provisions related specifically to 529 plan accounts, beginning with the 2018 tax year:
Account owners can use assets to pay for qualified K-12 expenses up to $10,000 per year per student.
Account owners can treat K-12 withdrawals as qualified expenses with respect to the federal tax benefit. The tax treatment of such withdrawals at the state level, determined by the account owner's state of residence is less clear, and states may ultimately determine the treatment of these withdrawals independently. Account owners should consult their tax advisors for further guidance.
Account owners can roll over 529 plans to ABLE plans, up to the ABLE annual contribution limit. States may need to expand the definition of qualified withdrawals to include rollovers into ABLE plans. Without a change to the definition, such rollovers could be categorized as nonqualified withdrawals.
We'll provide more information as additional details about the effects of the tax bill become clear. We encourage you to consult a qualified tax advisor about your personal situation.
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For more information about HI529-Hawaii's College Savings Program ("HI529"), call 1-866-529-3343 or visit www.hi529.comto obtain aPlan 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, Inc. ("ABD"), is the Distributor of HI529.
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 consult your financial, tax, or other adviser 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 plan(s), or any other 529 plan, to learn more about those plan’s 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.
The State of Hawaii's College Savings Program Trust Fund (the "Trust") is a trust created by the State of Hawai'i. HI529 is administered by the Director of Finance of the Department of Budget and Finance on behalf of the State of Hawai'i. ABD, the Program Manager, and its affiliates have overall responsibility for the day-to-day operations, including recordkeeping and administrative servicing agent. The Vanguard Group, Inc. serves as Investment Manager for the Plan. When you invest in HI529, you are purchasing units issued by the Trust. Units are municipal securities and the value of the units will vary with market conditions. HI529's portfolios are municipal securities that will vary with market conditions.
Investment returns are not guaranteed, and you could lose money by investing in HI529. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.
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