529 Savings Plan

Under the Tax Cuts and Jobs Act, the benefits of 529 plans have been expanded to include elementary and secondary school expenses. This means that if you have a college savings plan, you may withdraw up to $10,000 per year tax-free for elementary and high school expenses, such as tuition and books. In addition, Virginia currently allows an income tax deduction of up to $4,000 per account per year for contributions to a Virginia 529, with an unlimited carryforward of excess contributions. Contributions are fully deductible in the year of contribution for taxpayers at least 70 years of age. If you are thinking about using 529 account funds to pay HRA tuition, you should consult with your financial and tax advisors to confirm that a withdrawal from or contribution to a 529 plan is appropriate to your particular circumstances.