다음은 Good Seed 의 서기로 부임하신 Ellie 자매님의 요점 정리 노트를 제가 조금 수정 보완한 것입니다.

• 529 Plan
o For elementary, middle, high (only up to $10,000 a year), university, college or vocational schools
o Tuition, books, supplies, equipment, computer
o Room & board (only for at least half time student)
o Special Needs expenses for post-secondary enrollment & attendance
o No tax deduction for contributions
o No tax for the earnings (interest, dividend, capital gain) when used for education
o Maximum lifetime contribution amount limit : $529,000 (for CA Scholarshare program)
Can be transferred to sibling or other family members' 529 accounts

• ESA (Education Saving Account)
o Tuition, books, supplies, equipment, computer
o Room & board (only for at least half time student)
o Academic tutoring, special need services for K thru 12
o Uniforms, room & board, transportation, extended day programs for K thru 12 if required by school
o Special Needs expenses for post-secondary enrollment & attendance
o Elementary, middle school, high school, university, college or vocational schools
o No tax for the earnings when used for education
o Annual contribution Limit: $2000 per year
o Age limit : under 18 and has to be distributed by 30 (No age limit for special needs)
o AGI Income limit : less than $110K for single, $220K for married
Can be transferred to sibling or other family members' ESA accounts

• IRA ($6000 per person per year, $7000 if over 50)
o Traditional IRA : recommended for people without 401(k) or 403(b) plan at work to get a deduction
o Spousal IRA for non-working spouse
(IRA can be used for post secondary education for you, your spouse, your child and grandchild including special needs services for enrollment & attendance without incurring early distribution penalty, but may have to pay tax for traditional IRA )

o Roth IRA
 No deduction
 No tax for earnings when distributed after 5 years for over 59.5
 Withdraw principal anytime without any tax consequences
 No RMD (Required Minimum Distribution) as compared to RMD at 72 for Traditional IRA
 AGI (Adjusted Gross Income) phase out

• FAFSA (Free Application for Federal Student Aid )
o If you have 529 plan or ESA, Financial Aid will be reduced
o a maximum of 5.64% of the account balance will be counted as EFC (expected family contribution)

• Medi-Cal (Medicaid)
o California excludes 529 plans when considering eligibility for Medi-Cal.
o If money in 529 plan is used for non–educational purpose, it will be considered as countable resources for SSI for beneficiary child. Parent is the owner of 529 plan and it is countable resource to parent for SSI purpose.


• Medical Expenses
o Total medical expenses have to be over 7.5% of AGI to be deductible as itemized deduction
o Special education expenses are qualified as medical expense with doctor's recommendation
(You need to keep all the records as the burden of proof lies with the taxpayer.)
Also include improvements made to accommodate a home to disabled condition. (The cost of the improvement is reduced by the increase in the value of the property.)


• Dependent & child care credit
o When both of parents are working and both have earned income
o Or full time student or disabled (4wks before and 6 wks after child birth, 2 more wks for C-section)
o No age limitation for Special needs kids (under 13 for typically developing children)

• ABLE (529A) for the people who developed their disability before age of 26
o Similar to 529 plan but only for the qualified disability expenses
o Account for special needs without losing public benefits such as SSI or Medi-Cal
o Rollover from 529 plan up to $15000 per year until 2025
o Contribution limit : $15000 per year (plus additional $12140 of earned income if working) including rollover
o Maximum Contribution Amount Limit: $529,000 (for CA Cal ABLE program)
o Need to maintain the account balance under $100,000 in order not to suspend SSI or Medi-Cal
o After you die, money in your ABLE account may be used to pay back the Medicaid program in other states
o Californians with a Cal ABLE account will be protected from Medi-Cal recovery upon the account owner’s passing.

* SSI asset limit : $2000 for single, $3000 for married

* Special Needs Trust :
No limits on contributions (as compared to $15000 per year in ABLE account)
Does not require that your disability began before you turned 26
Any money left in the trust when you die does not have to be used to repay Medicaid-short, if the trust was set up by someone other than you (a Third Party Trust), with their money
The money in a Special Needs Trust does not have to be spent on qualified disability expenses


* Title on the house and other properties in CA: Community Property with Right of Survivorship for Step Up basis if appreciates in value


추가 사항

1.

"Californians with a CalABLE account will be protected from Medi-Cal recovery upon the account owner’s passing."
https://www.treasurer.ca.gov/able/resources/factsheets/factsheet-extensive-en-us.pdf
( #12)

California 주민이 Cal ABLE account owner 인 경우 Medi-Cal Recovery 를 금지하는 CA SB 218 이 나중에 통과되었네요. CA가 아닌 다른 주의 ABLE account 에는 Medicaid recovery 조항이 있을 수도 있습니다.

그리고 만에 하나, 부동산이나 동산의 구입 가격보다 향후 배우자 사망 당시의 싯가 (date of death value) 가 내려갈 경우에는 Title 을 Community Property 로 하면 손해를 보실 수 있습니다


2. 529 Plan account 에 남아 있는 금액을 ABLE account 로 rollover 할 경우
현행법 상으로 일 년에 $15,000 까지만 Rollover 하실 수 있습니다.
그리고 본인 뿐만 아니라 가족의 529 plan account 에도 해당이 되네요.

Rollovers and transfers from section 529 plans
Families may now roll over funds from a 529 plan to another family member’s ABLE account.
The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a section 529 plan count toward the annual contribution limit.
Here is an example: the $15,000 annual contribution limit would be met by parents contributing $10,000 to their child’s ABLE account and rolling over $5,000 from a 529 plan to the same ABLE account.
https://www.irs.gov/newsroom/tax-reform-affects-able-accounts-savers-credit-529-rollovers


3. 증여세 (gift tax) 관련 도 알아두셔야 할 것 같아서 여기에 올립니다.

529 구좌에 넣어주시는 금액도 gift 로 간주됩니다. 각 자녀 당 1년에 $15,000 (부모님 두 분 합해서 $30,000) 까지는 gift tax return 을 하실 필요가 없구요.

529 account 에 $75,000 (부모님 합해서 $150,000) 까지 한꺼번에 미리 앞당겨서 5년 치를 넣어주실 수도 있어요. (이 경우에는 gift tax return 을 하셔야 하지만 gift tax 가 없구요.)

The 5-year election
You may have read that you can contribute as much as $75,000 to a 529 plan without incurring gift taxes. This is absolutely true, as long as your contribution is at least $15,000 and you spread it over a five-year period.

두 분 합해서 일 년에 $30,000 이상을 하시게 되면 gift tax return 을 file 하셔야 합니다. 그런데 이 경우에는 life time exclusion 금액이 줄어들게 됩니다.

Does this mean if you contribute more than $15,000 in one year or $75,000 over five years you'll have to pay gift tax? Not necessarily. As mentioned above, any gifts above the annual exclusion amounts will have to be reported on the federal tax Form 709, and these will be counted against the lifetime exclusion (currently $11.4 million per individual in 2019). Any amounts that exceed the exclusion could trigger gift taxes of up to 40%, but if you're within the limit you won't be subject to taxes.
https://www.savingforcollege.com/article/how-much-can-you-contribute-to-a-529-plan


자녀분들 대학으로 직접 지불하시는 등록금은 1년에 $15,000 이 넘어도 gift tax return 을 하실 필요가 없습니다.
https://www.irs.gov/pub/irs-pdf/i709.pdf (page 2)



4. Backdoor Roth IRA for high income earners 관심 있으신 엄마들 읽어보세요.
https://www.physicianonfire.com/backdoor/


감사합니다.