States implementing the 10k per year rule

[rtaylor434]

The new tax law for 2018 allows 10k per child per year to be drawn out of 529's for pre college private school tuition. However, states have to change their own rules to allow this.

Which states have made this change so we don't withdraw funds and get hit with a penalty.

I am interested in UTAH and VIRGINIA for now but wonder if a list is being maintained that we can access.

[dcandmc]

Do you meant that states with a state income tax have to change their own rules to allow this for state income tax purposes? Because states have zero say in whether or not it's allowed for federal tax purposes -- that's a done deal.

[rtaylor434]

The Federal Tax rule is in the tax law but each state has tax laws on 529's held within the state stince 529's are state managed items.

Per articles I have read the states are being a bit slow to implement the 10k tax rule so if you withdraw from a state that has not made the change you could be penalty by the state itself not the Fed.

Example from Washington Post article: "states, such as Iowa, Maine and Nebraska have warned that they may have to introduce 529 legislation before residents can be assured of favorable tax treatment."

HOWEVER, that same article says that SavingforCollege has a list available (which I didn't find initially). It included the two states I list. The article talking about this is here:

You can now use a 529 to pay for K-12 tuition — so should you?

[dcandmc]

If you are a legal resident of state A and your 529 plan is administered by state B, C or D, I don't think it matters what the state tax laws are in state B, C or D. The laws of your home state will determine whether or not the earnings from a 529 distribution used for K-12 tuition, from any 529 plan, are subject to state income tax.