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Take advantage of Indiana tax advantages based on contributions to CollegeChoice CD! Also, Hoosiers enjoy a high maximum contribution limit of $450,000 per beneficiary. If you are an Indiana taxpayer (resident or non-resident), you are eligible for a State income tax credit for contributions to an account in CollegeChoice CD.1 The tax credit is available to an individual filing a single return or a married couple filing a joint return. The amount of the credit is the lesser of the following:
On December 20, 2019, the SECURE Act was signed into law. The SECURE Act amended Section 529 to permit withdrawals to pay for expenses for apprenticeship programs registered and certified with the Secretary of Labor under the National Apprenticeship Act (Apprenticeship Program Expenses) and to pay principal and interest on certain qualified education loans (Education Loan Repayments) for a beneficiary or any of the beneficiary’s siblings. The loan repayment provisions apply to repayments up to a lifetime maximum of $10,000 per individual. The effective date of the SECURE Act is January 1, 2019.
In March 2020, Indiana Code Section 6-3-3-12 was amended (Amendment) to:
These changes are effective January 1, 2020. This means that, for the tax year beginning January 1, 2019, a distribution to make an Education Loan Repayment will not be subject to recapture of the Indiana state income tax credit but, beginning January 1, 2020, a distribution to make an Education Loan Repayment will be subject to recapture of the Indiana state income tax credit. In addition, any earnings distributed will be included in your Indiana adjusted gross income for the applicable tax year.
The Amendment did not address Apprenticeship Program Expenses. Distributions used to pay those expense are considered tax free distributions for both federal and Indiana tax purposes.
As with any change to law, we encourage account owners to consult a qualified tax advisor regarding the application of federal and state tax laws to their particular situation. Please see the CollegeChoice CD Disclosure Statement for detailed information.
If you have questions about the CollegeChoice CD 529 Savings Plan, you can reach our Customer Service team by phone at 888-913-2885, Monday through Friday from 9 a.m. to 6 p.m., Eastern Time.
Remember: You do not need to be the Account Owner to take the Indiana state income tax credit. In order to take advantage of this year's Indiana state income tax credit,* your contribution or deposit must be received by December 31. We will generally treat contributions sent by U.S. mail as having been made in a given year if checks are postmarked on or before December 31 of the applicable year, and provided the checks are subsequently paid. For electronic contributions, we will generally treat contributions received by us in a given year as having been made in that year if you initiate them on or before 11:59 p.m. Eastern Time on December 31 of that year and the funds are successfully deducted from your checking or savings account at another financial institution.Electronic bank transfers are the quickest and most efficient way to make a contribution. You may take advantage of the electronic bank transfer option through our Online Banking feature.
*If you are an Indiana taxpayer (resident or non-resident, individual or married), you may receive a 20% State tax credit against your adjusted gross income, up to a maximum of $1,500, for contributions to a CollegeChoice CD Account. Rollover contributions from another Qualified Tuition Program into a CollegeChoice CD Account do not count as contributions eligible for the tax credit. This credit may be subject to recapture from the account owner (not the contributor) in certain circumstances, such as rollovers to another state’s 529 plan, federal nonqualified withdrawals, withdrawals used to pay elementary or secondary school tuition for a school outside of Indiana, or qualified education loan repayments as described in the Disclosure Booklet.
NexBank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
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