EDUCATION/TAXES: “State officials across the country are increasingly worried that a provision in the new tax law extending college savings accounts to K-12 expenses will blow an unexpected hole in their budgets. The federal government created modern 529 savings plans in the mid-1990s that allow families to put away money for education and allow it to grow tax-free. As an added incentive, more than 30 states offer their own tax breaks to people who put money into the accounts.
In December, as part of a broad tax overhaul, Congress expanded the accounts to cover up to $10,000 a year in expenses for kindergarten through 12th grade.
State budget officials are now concerned that a large number of parents will use 529 accounts to pay private-school tuition, giving them a new write-off for their state taxes.
That could result in potentially millions of dollars in lost tax revenue at a time when most states are struggling to close budget deficits.”
-Michelle Hackman, “States Worry You May Claim 529 Tax Exemption for K-12 School Tuition,” The Wall Street Journal online, Feb. 16, 2018 06:30am