On Dec. 20, 2019, the Further Consolidated Appropriations Act, 2020 was signed into law. This federal spending bill includes provisions that allow 529 withdrawals to pay for certain expenses associated with apprenticeship programs registered and certified by the Secretary of Labor under the National Apprenticeship Act, and to pay principal and interest on certain qualified education loans for the beneficiary of your account or any of the beneficiary’s siblings. The loan repayment provisions apply to repayments up to $10,000 per individual. This $10,000 is a lifetime amount, not an annual limit. Withdrawals for student loan repayment and/or apprenticeships can only be made to the Account Owner or the Beneficiary.
These provisions contain language that allows Ohio 529 Plan account holders to request withdrawals from their CollegeAdvantage account, for qualified education loan payments or qualified apprenticeship program expenses noted above and made after Dec. 31, 2018. All withdrawal requests must be made within the same calendar year in which the expense was incurred.
According to the Act, the withdrawals described above will not be considered taxable distributions by the IRS. As always, we encourage account owners to consult a qualified tax professional about these new developments and how they relate to their personal situation.
If you wish to request a withdrawal for any qualified higher education expenses related to apprenticeship program expenses or education loan payments, made during the 2020 calendar year, please follow this guidance.
As with any questions you may have, you can also call our Customer Service Department at 1-800-AFFORD-IT (1-800-233-6734), which is open from 8:30 a.m. – 6 p.m. EST Monday-Friday.
