Private school parents getting tax break
Both houses of the Legislature at this year’s regular session unanimously approved an education savings account for families paying kindergarten through 12th grade private school tuition. Those who take advantage of the new law can receive a federal tax break and possibly get a state tax break in the future.
Rep. Franklin Foil, R-Baton Rouge, and sponsor of Act 687, said, “If I’m a parent or grandparent or relative of the student who invests money, you can use this.”
Foil and state Treasurer John Schroder, who will oversee the savings accounts, will discuss the new tax break at a press conference scheduled for today.
The Advocate said the new law is a scaled back version of a similar measure that allows both state and federal tax breaks for families that set up savings accounts for college. That plan is called the Student Tuition Assistance and Revenue Trust program, or START.
The START program has more than 61,000 of those accounts totaling $886 million, the newspaper said. The new program will benefit the roughly 140,000 students who attend private schools.
Foil said he hopes the new K-12 savings program will be equally successful. A federal tax cut last year makes it possible for families to get a federal tax break for the new plan when they pay 2018 taxes in 2019.
A special provision in the new law makes it possible for those who had START accounts as of Dec. 31, 2017, to withdraw up to $10,000 this year to pay K-12 tuition-related expenses. Those have to be for children listed as the beneficiaries in the START accounts.
There have been 173 withdrawals from existing START accounts to pay 2018-19 K-12 expenses. Families of students in the lower grades sometimes pay as much as $22,000 per year in expenses. Transfers from those accounts that are allowed this year would be banned after 2018.
Foil echoed the sentiments of many legislators when he said he hopes to expand the K-12 program and make a state tax cut available when the state’s financial picture improves. Any savings program that makes a quality education available for more of the state’s young people is money well spent.