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, paragraph "a", a participant may make contributions to an account which is established for the purpose of meeting the qualified higher 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 "f", contributions may only be made in the form of cash.
e. Pursuant to section 12D.4, subsection 1, paragraph "g", a participant or beneficiary shall not provide investment direction regarding program contributions or earnings held by the trust.
f. Pursuant to section 12D.5, subsection 1, penalties are provided on refunds of earnings which are not used for qualified higher education expenses of the beneficiary, made on account of the death or disability of the designated beneficiary, or made due to scholarship, allowance, or payment receipt as provided in section 529(b)(3) of the Internal Revenue Code.
g. Pursuant to section 12D.6, subsection 7, 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, 33, and 34, and section 422.35, subsection 14.
98 Acts, ch 1172, §9; 99 Acts, ch 122, §9, 10
1999 amendment to subsection 1, paragraph f applies retroactively to July 1, 1998; 99 Acts, ch 122, §10
Previous Section 12D.8
Next Section 12D.10
© 2001 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Mon Jan 22 17:13:42 CST 2001
URL: /DOCS/IACODE/2001/12D/9.html
jhf