Readers continue to write to us with questions about financing college, including how best to use “529” plans, the tax-advantaged higher-education accounts that invest in mutual funds. We asked experts to help answer this month’s questions. An excerpt from Treasurer Boozer’s interview is below…
I would like to reward employees by starting 529 accounts for their children that will vest after 10 years of the parents’ employment at our company. Is this possible?
Yes. Because a 529 is funded with after-tax money, the main advantage of a workplace payroll-deduction 529 account is convenience for the employee.
In terms of vesting, you are allowed to set any restrictions you wish on a workplace plan as long as you follow the IRS rules regarding 529 accounts, says Alabama State Treasurer Young Boozer III, who chairs the College Savings Plans Network.
“Employers may contribute a match or add additional funds, but the employee will be taxed on these amounts, which are considered income to the employee, unless the employer makes arrangements to pick up the IRS tab,” Adam says. Some states, including Nevada, give tax credits to employers who offer 529 plans and match employee contributions, she says.
Before launching your program, call the 529 plan administered by the state where your company is based to see if there are any other state incentives that could benefit your employees, Boozer says.
When paying my child’s tuition, I first paid the college myself and had our 529 plan reimburse me. Then I read that I should instead have the check sent in my child’s name, so when I made a withdrawal from another one of our 529 plans, I did that. Will this affect our taxes?
You are allowed to have the check made out in either name, so you have done nothing wrong. “Essentially, the tax consequences, if any, are applicable to the payee of the check, as they received the 1099,” Boozer says. If you used the withdrawal for qualified educational expenses—tuition, books, mandatory fees, room and board, computers and related costs—you won’t have to pay any taxes. If the money went toward something else, you’ll have to pay taxes on any gains, plus a 10% penalty (you won’t owe anything on the portion of your withdrawal that represents your contributions to the account).
“One caveat: If at any point you do end up with a taxable 529 distribution, either because you withdrew too much, or withdrew the wrong year, or withdrew funds to cover nonqualified expenses, it is usually beneficial tax-wise to have that withdrawal reported to the student, who’s probably in a lower tax bracket, rather than to the parent,” Adam says.
As I understand it, computers are only allowed as a 529 expense if the computer is listed as a requirement by the college. Is that correct?
No. As of Jan. 1, 2015, you can use 529 money to buy computers and related equipment even if the school doesn’t require it. What’s now covered: the purchase of any computer technology such as laptops, desktops and even iPads, related peripheral equipment such as printers, computer software used primarily for educational purposes, and related services such as internet access if used by the beneficiary of the 529 plan during any of the years the beneficiary is enrolled at an eligible educational institution, Adam says. Adam recommends keeping your receipts in case the IRS asks about them, and matching your 529 withdrawals to the same year you bought the computer equipment.
VIEW FULL STORY: http://www.marketwatch.com/story/does-it-pay-to-start-at-a-community-college-it-depends-2017-04-20
The Office of the Illinois State Treasurer (“Treasurer”) is issuing this Request for Proposals (“RFP”) for Automated Teller Machine (ATM) Services – State Agencies to provide employees and visitors to various State of Illinois Agencies (“Agency” or “Agencies”) convenient access to ATM services on a year-round basis and for special events. Specifically, such ATM services include the installation, branding, cash management, cash delivery, technical support, customer service, and maintenance of ATMs located at multiple Agency facilities. Vendors and financial institutions that submit Proposals (“Respondent”) shall submit their Proposals by 2:00 p.m. CT on May 12, 2017.
The Treasurer seeks a Contractor with an efficient and cost effective ATM services process. The winning Respondent (“Contractor”) must be authorized to do business in Illinois and have a presence in Illinois. In addition, if Respondent is a financial institution, then Respondent must also be an Illinois bank or a national bank with a presence in Illinois and be a member of the Federal Reserve System with access to all services as a member bank, and qualify as a depository of public funds. At the time the Contractor submits its Proposal, or prior to that time, if required by law, the Contractor must have all required licenses, bonding, facilities, equipment and trained personnel necessary to perform the work specified in this RFP.
Finally, the Contractor must have a minimum of five (5) years of experience performing the services being sought by this RFP. The Contractor shall enter into a contract with the Treasurer (“Agreement”) for an initial term of four (4) years. Upon expiration of this term, the Treasurer may elect to extend the Agreement for additional periods of time, not to exceed a total of ten (10) years, including the initial four (4) years.
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TOPEKA – State Sen. Jacob LaTurner will replace Republican Ron Estes as the state treasurer of Kansas.
Gov. Sam Brownback announced the appointment Tuesday morning after Estes sent the governor a letter announcing he would resign on April 25.
“I know Jake to be a fine man, a skilled public servant and a fiercely loyal Kansan,” Brownback said.
LaTurner, a 29-year-old Pittsburg Republican, has served in the Senate since 2013 and was chairman of the Senate’s federal and state affairs committee this year.
The conservative Republican has voted against tax increases and Medicaid expansion this session.
LaTurner lists his occupation on the Kansas Legislature’s website as a small business owner. He said during a press conference Tuesday that he does consulting work that deals with customer service
“The treasurer’s office is an exciting place to be,” LaTurner said.
B.J. Harden, the assistant state treasurer, described the office as “the state’s bank.”
The treasurer’s office also oversees the state’s effort to help people find their unclaimed property money, and administers a college education savings program and other financial services, according to the state’s website.
LaTurner said his intention was to run for a full four-year term in 2018 when the office is on the ballot again.
The governor’s appointment of LaTurner opens a spot in the Kansas Senate as lawmakers prepare to return to Topeka on May 1. The Legislature is facing almost $1 billion in projected budget shortfalls through June of 2019.
The Illinois Secure Choice Savings Board (“Board”) authorized the Office of the Illinois State Treasurer (“Treasurer”) to issue this Request for Proposals for Illinois Secure Choice Program Manager (“RFP”) on behalf of the Board for the Illinois Secure Choice Savings Program (“Secure Choice”).
The successful Respondent (“Contractor”) will provide all of the necessary services to run and operate Secure Choice, with the overall goal of providing Illinois workers with access to an easy, safe, and convenient retirement savings tool. The Treasurer and Board are seeking Proposals from vendors, such as record keepers, investment management firms, and financial services firms, with the expertise and ability to launch and manage a new state-run retirement savings program for private sector workers.
The ideal Respondent is one with a strong investment track record; comprehensive risk management skills; experience establishing, developing, and administrating defined contribution retirement programs and Individual Retirement Account (“IRA”) programs; the ability to provide comprehensive record keeping services; the capacity to successfully onboard and enroll a significant number of employers and employees; and expertise in client counseling, portfolio management, and management and evaluation of passive equity and fixed income index funds, asset allocation, glide paths, and defined contribution best practices.
The Contractor shall enter into a contract with the Treasurer and the Board (“Agreement”) for an initial term of seven ( 7) years. The Treasurer and the Board may elect to extend the Agreement for a period of time agreed upon by the parties, not to exceed a total term of ten (10) years, including the initial seven (7) years.
Respondents must submit their Proposals by 2:00 p.m. CT on May 25, 2017.
As a part of Financial Literacy month, the Financial Education & Empowerment Committee has been compiling updates to our Financial Education Census where we have information about each states’ financial education programs. The updated document is now available on our website on the Financial Education section under the Affiliates & Networks tab. We hope you will use this as a resource in advancing financial education in your state!
VIEW FINANCIAL LITERACY CENSUS