This.

To avoid the exact scenario the OP is describing - deposit into 529, get immediate tax break and earnings enhancement then withdraw money for school in the spring - neither are available on the K-12 version.

Basically the only benefit of the K-12 version is tax free growth and withdrawal.

ETA - to clarify, you can’t double dip on the tax break. You either get the start deduction or the tuition deduction - not both. If you owe $5,000 in tuition in 3 months, you’re better off just taking the Elementary and Secondary School Tuition Credit and not messing with START.

This post was edited on 2/13/24 at 9:47 pm

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Posted by Delacroix

Member since Oct 2008

3992 posts

Posted on 2/14/24 at 10:38 am to slackster

quote:
To avoid the exact scenario the OP is describing - deposit into 529, get immediate tax break and earnings enhancement then withdraw money for school in the spring - neither are available on the K-12 version.

cant you only withdraw 529 for Higher education expenses? How would you go about withdrawing for K-12 Expenses from the base 529 plan?

quote:
ETA - to clarify, you can’t double dip on the tax break. You either get the start deduction or the tuition deduction - not both. If you owe $5,000 in tuition in 3 months, you’re better off just taking the Elementary and Secondary School Tuition Credit and not messing with START.

One advantage of the START K-12 program is that you are not taxed on earnings. Seems like the best strategy would be to contribute to START K-12 from birth-Kindergarden, then stop contributing once you have actual tuition expenses then claim the tuition deduction. Unless I'm misunderstanding something?

This post was edited on 2/14/24 at 10:40 am

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