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Makes Changes to 529 Accounts
The Setting Every Community Up for Retirement Enhancements Act (“SECURE Act”) of 2020 has expanded the definition of “higher education expense” for which 529 plans can be used to include books, fees, supplies and equipment required for participation in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act.
The definition of “higher education expense” for which 529 plan funds can be expended include the amounts paid as principal or interest on a qualified education loan of the designated beneficiary of the designated beneficiary’s sibling. However, the maximum amount that can be treated as a qualified expense for education loans may not exceed $10,000. The $10,000 amount is reduced by the amount of distributions treated as a qualified education expense made in prior taxable years.