12D.9 Tax considerations.
1. For federal income tax purposes, the Iowa educational savings plan trust shall be considered a qualified state tuition program exempt from taxation pursuant to section 529 of the Internal Revenue Code. The Iowa educational savings plan trust meets the requirements of section 529(b), of the Internal Revenue Code, as follows:
a. Pursuant to section 12D.3, subsection 1, a participant may make contributions to an account which is established for the purpose of meeting the qualified education expenses of the designated beneficiary of the account.
b. Pursuant to section 12D.3, subsection 1, a maximum contribution level is established.
c. Pursuant to section 12D.4, subsection 1, paragraph “b”, a separate account is established for each beneficiary.
d. Pursuant to section 12D.4, subsection 1, paragraph “c”, contributions may only be made in the form of cash.
e. Pursuant to section 12D.4, subsection 1, paragraph “d”, a participant or beneficiary shall not provide investment direction regarding program contributions or earnings held by the trust.
f. Pursuant to section 12D.6, subsection 6, a participant shall not pledge any interest in the trust as security for a loan.
2. State income tax treatment of the Iowa educational savings plan trust shall be as provided in section 422.7, subsections 32 and 33.
3. State inheritance tax treatment of interests in Iowa educational savings plans shall be as provided in section 450.4, subsection 8. This subsection shall apply to all Iowa educational savings plans existing on or after July 1, 1998.
98 Acts, ch 1172, §9; 99 Acts, ch 122, §9, 10; 2003 Acts, ch 142, §2, 11; 2004 Acts, ch 1079, §13, 14, 17; 2005 Acts, ch 179, §107; 2008 Acts, ch 1164, §1; 2018 Acts, ch 1161, §143, 147, 148
For future amendment to subsection 2, effective on or after January 1, 2023, contingent upon meeting certain net general fund revenue criteria, see 2018 Acts, ch 1161, §99, 133, 134
2018 amendment to subsection 1, paragraph a, applies retroactively to January 1, 2018, for withdrawals from the Iowa educational savings plan trust made on or after that date; 2018 Acts, ch 1161, §148
Subsection 1, paragraph a amended
Copyright ©2024 LegalFix. All rights reserved. LegalFix is not a law firm, is not licensed to practice law, and does not provide legal advice, services, or representation. The information on this website is an overview of the legal plans you can purchase—or that may be provided by your employer as an employee benefit or by your credit union or other membership group as a membership benefit.
LegalFix provides its members with easy access to affordable legal services through a network of independent law firms. LegalFix, its corporate entity, and its officers, directors, employees, agents, and contractors do not provide legal advice, services, or representation—directly or indirectly.
The articles and information on the site are not legal advice and should not be relied upon—they are for information purposes only. You should become a LegalFix member to get legal services from one of our network law firms.
You should not disclose confidential or potentially incriminating information to LegalFix—you should only communicate such information to your network law firm.
The benefits and legal services described in the LegalFix legal plans are not always available in all states or with all plans. See the legal plan Benefit Overview and the more comprehensive legal plan contract during checkout for coverage details in your state.
Use of this website, the purchase of legal plans, and access to the LegalFix networks of law firms are subject to the LegalFix Terms of Service and Privacy Policy.