MT Website Update

On December 22, 2017, new federal tax reform legislation, Public Law 115-97 (H.R. 1), was signed into law. The law amends Section 529 of the Code to permit withdrawals from 529 Plan accounts up to $10,000 per year per student (in the aggregate across all Qualified Tuition Programs for that student) for tuition expenses in connection with enrollment and attendance at an elementary or secondary public, private or religious school (K-12 Tuition). The law also permits rollovers from a 529 Plan account to a Qualified ABLE Program account (ABLE Rollover Distribution) up to the annual $15,000 contribution limit.  We are working on updating our website to reflect the new U.S. tax law. In the meantime, please note the following:

  • The Montana Department of Revenue (MDOR) has stated that despite changes made to Section 529, a withdrawal used to pay K-12 Tuition is considered a non-qualified withdrawal for Montana state tax purposes.  Funds used to pay for K-12 Tuition (which is considered a Qualified Expense for federal tax purposes) may subject you to the Montana state recapture tax on contributions previously deducted and require your Beneficiary to include the earnings in their gross income. 
  • The MDOR has not provided guidance on the State tax law treatment of ABLE Rollover Distributions.
  • Montana taxpayers should consult their tax advisors before making a contribution or withdrawal for K-12 Tuition or initiating an ABLE Rollover Distribution.  We are continuing to evaluate the new law and will provide updates as additional details about the effects of the new federal tax law on Montana state tax law become clear. Achieve Montana account owners in other states should seek guidance from the state in which they pay taxes.