Reform Guidance - College Savings Iowa (529 Plan) Deduction

Iowa Governor Kim Reynolds signed Senate File 2417, an extensive state tax reform bill to improve the tax structure in Iowa. The 2018 Iowa Tax Reform Bill includes an updated federal conformity provision beginning with tax year 2018, which allows the same deductions for certain withdrawals from a College Savings Iowa and IAdvisor 529 Plan Accounts (529 Plans) and certain rollovers at the state level that are allowed at the federal level. 529 Plans, administered by the Iowa Treasurer of State, help Iowans save money to pay for certain educational expenses for a specific beneficiary. Any money contributed to the account during a given year may be deducted on the account holder’s Iowa income tax return for that year, subject to an annual contribution cap.

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