Texas 529 Update, June 2021 Page: 3
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Keeping It in the Family
Do you have
questions about
your TTPF account?
Join us for a
in
July. We'll discuss
topics ranging from
opening an account
for a young child to
using your account
when your loved
one goes to college.
Please us any
questions you would
like us to answer.Aunt or uncle, or their spouse
First cousin
The good news is that there are no fees
for a change of beneficiary, and, generally,
there are no tax penalties associated with a
change of beneficiary, provided the change
is in compliance with Section 529 of the
Internal Revenue Code. You should consultWondering what happens ifyour child
doesn't use all or any of the tuition units in
your account?You have several options.
One ofthem is to change the beneficiary
of the account to a "member of the family"
prior to the expiration date of your Texas
Tuition Promise Fund contract (10 years
from the beneficiary's projected high school
graduation date).
You can change the beneficiary to a person
who meets the plan's residency requirement on
the date of the change and who is a member
of the family of the current beneficiary.
Examples of a member of the family include
the beneficiary's:
* Spouse
Child
Sibling or step-sibling, or their spouse
* Niece or nephew (a child of the
beneficiary's sibling, but not a child of a
brother- or sister-in-law), or their spousethe benefits in your account are to cancel the
account and requesta refund or transfer the
value of tuition units to another qualified 529
college savings plan. Transfer value (transfer
outside of redemption at a Texas public
college or university) is limited to the lesser
of (1) the costs of tuition and schoolwide
required fees the tuition unit would cover
at a Texas public college or university, or
(2) the original purchase price of the tuition
unit, plus or minus the plan's net investment
earnings or losses on that amount. See the
Plan Description and Master Agreement
for detailed information about these options.1 l,l}I
GLENN HEGAR TEXAS COMPTROLLER OF PUBLIC ACCOUNTS
with a tax advisor prior to changing
the beneficiary because doing so
may trigger gift tax or generation-
skipping tax consequences. When
deciding who your new beneficiary
will be, keep in mind that a new,
10-year, automatic termination
deadline would apply based on the
new beneficiary's projected high
school graduation date at the time
of the change.
Other options to consider if your
current beneficiary doesn't use3
1
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Texas. Comptroller's Office. Texas 529 Update, June 2021, periodical, June 2021; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1594092/m1/3/: accessed June 25, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.