529 Payments & Medical Deductions
529 Plan Assets Toward Tuition Payment
On December 22, 2017, the president signed new tax legislation into law that includes the following new provision, 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, which became effective January 1, 2018.
The Pennsylvania Department of Revenue has also conformed to the IRS tax code for K-12 schools, but account owners should contact the Commonwealth directly at www.revenue.pa.gov or by calling 717-787-8201 for clarifications.
The AIM Business Office will accept a check from your 529 Plan toward tuition with a signed letter stating that the source of the funds was from your 529 Plan. In the event that the tax authorities subsequently require confirmation from AIM for the payment made by you, we will submit copies of the relevant documentation that was provided to us by you including copies of your checks sent to us for payment of tuition.
Please note, 529 payments can only be applied to current fiscal year tuition. AIM's fiscal year begins on July 1 and ends on June 30, so 529 payments for 2020-2021 school year cannot be processed until after July 1, 2020.
However, we strongly encourage you to consult a qualified tax advisor about this matter, prior to making payments from your 529 Plan. They will be able to advise you appropriately on the procedures involved.
Tax-Deductible Medical Expenses
In most cases, tuition at AIM Academy is tax deductible as a federal itemized deduction under Special Education medical expenses. For further information consult a qualified tax advisor.
We're pleased that Finalsite, our school web communication platform, highlighted AIM and CFO Sid Ghosh in their recent blog about the new tax law allowing individuals to use 529 assets toward tuition.