The recent tax reform law created a great opportunity for Christian schools and families. The Tax Cuts and Jobs Act was signed into law December 22, 2017. A law in which has been widely supported across the Christian school and non-public school movement.
The new law expanded 529 savings plans so that they now allow savings for K–12 tuition expenses. The maximum distribution for K–12 tuition is $10,000 per year per child for expenses incurred beginning January 1, 2018. This means current account owners may begin using these funds immediately for K–12 tuition! (Be aware that Pennsylvania is still updating the laws so Pennsylvania’s state tax treatment may not yet be finalized.)
The practical effect of the change is that, beginning January 1, 2018, parents can begin to save for both college expenses and for K–12 tuition expenses and the earnings will grow free of federal tax. Special federal tax provisions exist for treatment of gifts to 529 savings plans so that even grandparents or extended family may contribute. This is a huge benefit you may want to talk to a tax accountant about in order to better plan for your continued enrollment at Salem Christian School.
CAPE-PA, ACSI, Legislative Update, and NY Times.