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Hi, I have a 5.5 year old son. I opened a College Savings account

Customer Question
about 5 years ago. Unfortunately...
Hi, I have a 5.5 year old son. I opened a College Savings account about 5 years ago. Unfortunately he got diagnosed with Autism. Can I withdraw money from the 529 Savings Plan without having to pay taxes?
Submitted: 7 years ago.Category: Tax
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Answered in 19 minutes by:
8/2/2010
Tax Professional: Robin D., Senior Tax Advisor 4 replied 7 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,212
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello and thank you for using Just Answer.

Ohio exempts distributions from a Ohio 529 plan attributable to the beneficiary's death, disability, or receipt of a scholarship. Ohio would not require that the distributions be included in Ohio taxable income if your son were disabled.

The principal portion of nonqualified withdrawals from this plan are included in Ohio taxable income to the extent of prior Ohio tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability, withdrawals made on account of the beneficiary's receipt of a scholarship, or rollovers.

The Federal tax implications are not the same.

Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income. The distribution is taxable on federal but the additional 10% penalty for not using the amount for education can be excepted if the designated beneficiary is disabled. A person is considered to be disabled if he or she shows proof that he or she cannot do any substantial gainful activity because of his or her physical or mental condition. A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration.

 

I can not advise you on whether your son is disabled because of his diagnosis. You will need to speak with your physician regarding that.

 

I sincerely XXXXX XXXXX information is helpful,

 

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Customer reply replied 7 years ago

Hi Robin,

 

That was very helpful! I sincerely XXXXX XXXXX quick response.

 

Regards,
Vivek

 

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