Are 529 plan earnings subject to the Kiddie Tax?
Interest earned on 529 plans and custodial 529 plan accounts is not subject to the Kiddie Tax. 529 plans are investment accounts designed to help individuals save for college. Contributions are made with after-tax dollars, and any interest earned on the investment grows tax-deferred. Distributions are completely tax-free when the funds are used to pay for qualified higher education expenses.
Nilodop wrote:My only thought is that these articles are stating that the 529 accounts are not subject to the kiddie tax if used for qualified education expenses. However, none of them state that, so I'm wondering if I am missing something.. That is indeed what they are saying. And there are articles that are more specific and complete. Here's one. https://www.savingforcollege.com/articl ... kiddie-tax.Are 529 plan earnings subject to the Kiddie Tax?
Interest earned on 529 plans and custodial 529 plan accounts is not subject to the Kiddie Tax. 529 plans are investment accounts designed to help individuals save for college. Contributions are made with after-tax dollars, and any interest earned on the investment grows tax-deferred. Distributions are completely tax-free when the funds are used to pay for qualified higher education expenses.
Users browsing this forum: 808CPA808, Google [Bot] and 104 guests