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CollegeCounts 529

The CollegeCounts 529 Fund is a qualified tuition program under Section 529 of the Internal Revenue Code that is offered by the State of Alabama. CollegeCounts makes it easy for parents, grandparents, family and friends to invest in the next generation.  The program is simple, offers significant tax advantages, requires no minimum contribution and allows for easy to set up automatic contributions.

To learn more, visit the CollegeCounts 529 website.

CollegeCounts COVID-19 Update

During this unprecedented event, CollegeCounts is committed to continuing to provide the high level of service you have come to expect. Here are some important reminders for accessing and managing your CollegeCounts account:

YOUR ACCOUNT

• We are open to serve you

• Sign up for online access

  • Online access can provide the most effective and efficient processing of transactions
  • Online access allows you to view and transact on your account online 24/7
  • To activate online access:
  •  Visit collegecounts529.com and click on “Login” in the upper, right corner of the page and select “Current Investor Login”
  •  Click “Sign up for access” and follow the easy online steps Important: Once in your account, sign up for e-Statements and e-Delivery

Our Customer Care Center remains open for your questions

  • We stand ready to serve. Should you experience a longer wait time we apologize for any inconvenience. Thank you for your understanding.
  • Please note some national carriers have and may experience intermittent delays.

• Contacting Us

  • Direct: 402.323.1048
  • Toll-Free: 866.529.2228
    (7:00 a.m. – 7:00 p.m. CT)

• Scams

  • A tip for account holders during this time is to watch out for scams, including suspicious emails or text messages.
  • CollegeCounts will never ask you for your log in credentials in an email or text message.
  • If you receive a suspicious email or text message, don’t respond or click on any links/attachments.

REFUNDS FROM A COLLEGE
Recontribution of Refunded Amounts – If a student receives a refund of qualified education expenses that were treated as paid by a 529 distribution, the student can recontribute these amounts into any 529 for which they are the beneficiary within 60 days after the date of the refund to avoid the need to figure the taxable part of the 529 distribution. (Source: IRS 2019 Publication 970)

MARKET UPDATE

What is Happening in the Markets?
As history has shown, market downturns are normal and while unsettling, they tend to be short lived. The widespread impact of the coronavirus is dramatically impacting our daily lives and the markets. Broad economic uncertainty returned with a vengeance as the coronavirus continued its spread to Europe and the U.S. and an oil price war began between Saudi Arabia and Russia. Markets around the world have seen significant declines as investors are selling off riskier assets like stocks and looking for safe-haven assets such as treasuries and gold. The energy sector in particular has been a large drag on the market and volatility has been at extraordinary levels.
Efforts to slow the spread of the virus in the US and globally will have a negative impact on economic growth. Social distancing and other containment strategies are expanding and the negative impact on economic activity will likely grow as the approach becomes stricter and lasts longer than originally anticipated.
Central banks have stepped in across the globe to provide support and stimulus while governments are processing fiscal stimulus to accompany the monetary support. The last several weeks have also seen the Fed take extraordinary action to facilitate liquidity in the capital markets.
What Should Investors Do?
In light of current market conditions, account owners should continue to periodically assess their investment choices with their time horizon, risk tolerance and investment objectives in mind. Investors should keep in mind that market downturns happen, be thoughtful and steady when making investment decisions. Market timing, i.e. buying and selling investments based on what you believe the markets will do next, tends to be risky and is not a recommended investment strategy. Instead, investors do best when holding a diversified portfolio, investing steadily and adhering to a long-term plan.

HEALTH AND SAFETY

Our thoughts are with those adversely affected by the Coronavirus. Keeping both our associates, and the general public as safe as possible is one of our highest concerns right now, while still making sure your information is secure.

K-12 Tuition Expense

Certain sections of the Alabama income tax statute refer to definitions in Code Section 529, as amended, including the definition of “Qualified Higher Education Expenses.” For years after 2017, amendments to Code Section 529 treat withdrawals for tuition in connection with enrollment or attendance at an elementary or secondary school, whether public, private or religious, with a limit of $10,000 per year, per child collectively from all 529 plans to be “Qualified Higher Education Expenses.” Consequently, a Designated Beneficiary may be able to use the amounts in a Plan Account to pay for K-12 Tuition Expenses (as defined herein) without incurring adverse tax consequences. However, the Act (which has not been amended since adoption of the Code Section 529 amendments referred to above) only covers expenses at “eligible educational institutions.” The definition of this term in Code Section 529 does not appear to cover K-12 schools, although Internal Revenue Service Publication 970 provides that an “eligible educational institution” “can be either an eligible postsecondary school or, for amounts paid from distributions made after December 31, 2017, an eligible elementary or secondary school.” Publication 970 does not have the same authority as Code Section 529, and the Program recommends that taxpayers seek tax advice from an independent tax advisor with respect to their ability to use the Program to pay K-12 Tuition Expenses without incurring adverse tax consequences.

Information on this and other Alabama 529 Program topics can be found on the Alabama Department of Revenue’s site here: https://revenue.alabama.gov/individual-corporate/alabama-529-savings-plan-faq/.  Please note the answer to the third question “What is a nonqualified withdrawal from an Alabama 529 Savings Plan?

Apprenticeship and Student Loan Payments

Federal Law Change (December 20, 2019). The Federal Consolidated Appropriations Act (2020) was signed into law by the President. It includes several new provisions related to 529 college savings accounts, effective for distributions made after December 31, 2018:

DISTRIBUTIONS FOR CERTAIN EXPENSES ASSOCIATED WITH REGISTERED APPRENTICESHIP PROGRAMS. Qualified higher education expenses shall include expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act (29 U.S.C. 50).

DISTRIBUTIONS FOR QUALIFIED EDUCATION LOAN REPAYMENTS. Qualified higher education expenses shall include amounts paid as principal or interest on any qualified education loan (as defined in section 221(d) of the Internal Revenue Code) of the designated beneficiary or a sibling (as defined in section 152(d)(2)(B) of the Internal Revenue Code) of the designated beneficiary. The amount of distributions treated as a qualified higher education expense under this paragraph with respect to the loans of any individual shall not exceed $10,000 (reduced by the amount of distributions so treated for all prior taxable years).

Please consult with your financial, tax and other advisor to learn more about how the federal law changes and state-based benefits (including any limitations) would apply to your specific circumstances.

CollegeCounts Board of Directors

State Treasurer John McMillan, Chair, Montgomery, AL
Daniel Hughes, Montgomery, AL
Susan Tully, Guntersville, AL
Jim Purcell, Montgomery, AL
Jimmy Baker, Montgomery, AL
Edward Reifenberg, Montgomery, AL
Lt. Governor Will Ainsworth, Montgomery, AL
Heidi Lee, Montgomery, AL
Ken Tucker, Livingston, AL
Jack Knight, Birmingham, AL
Ron Stokes, Birmingham, AL

CollegeCounts 529 Board Meeting Materials

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UBT_CollegeCounts Scholarship logo_4CIn 2012 the CollegeCounts Board of Directors and then State Treasurer Young Boozer introduced the CollegeCounts Scholarship Program.  This scholarship was established to provide funding assistance to Alabama high school students with demonstrated financial need to attend college for the betterment of the student and the state. Scholarships are determined through an application process and awarded for a student’s freshman year only.

To learn more about this scholarship or to apply visit the CollegeCounts Scholarship section on our website.

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Governor Kay Ivey has issued a State of Emergency in response to the pandemic influenza outbreak of Coronavirus (COVID-19). As a result, the Office of State Treasurer is operating with limited staff until April 6, 2020. Therefore, response time may be longer than normal. For immediate assistance, please contact alatreas@treasury.alabama.gov or 334-242-7501.