Wed, December 31, 2008
IRS Announces Break for Section 529 College Savings Plan Investors
529 plan savers have received a small, temporary gift from the IRS. As I noted in an earlier post, IRS rules permit only one change per year in the way that a 529 plan is invested. However, in response to recent turmoil in financial markets, the IRS has announced that for 2009 only, it will permit up to two changes in investment strategy during the calendar year. As before, a change in investment strategy will also be permitted if the designated beneficiary of the account changes. The change provides a bit more flexibility for the ten million 529 plan owners who reportedly have invested $130 billion in the plans. If you’ve been meaning to make an adjustment in your child’s allocation and have not done so this year, it’s a good idea to do it now. Then, you'll still have two chances to adjust in 2009 if that's needed for some reason.