[quote=UCGal]The idea of changing the rules mid-course is inheritantly unfair… Perhaps – if this passes, they’d write is to 529’s are frozen to new contributions, and the old rules apply. (She says hopefully….)
That said – it might work out ok for me. My income is super low, so I’m back in the 15% bracket.
Ironically, I just put this months contributions into the kids 529’s yesterday. I might open a separate investment account and put the money in there. It’s not like the 529 is invested differently than I’d invest it – Vanguard index funds….[/quote]
Changing the rules mid-course would be unfair. That’s not the proposal. The proposal (which isn’t finalized) would only apply to new contributions. Distributions related to prior contributions would continue to be treated as they are under current law.
All this hand wringing is for nothing. Tax laws change almost every year. New benefits appear, and old ones disappear. There has almost never been an unfair retroactive change to federal tax law. With extraordinarily minor exceptions, changes have been prospective only.
