§3100.5. Education savings accounts; types, use, limitations, and disclosures
A.
(1)(a) The authority may enter into an account owner's agreement with any person
who qualifies pursuant to R.S. 17:3100.6(A) for the creation of an education savings account
on behalf of a beneficiary. When the number of available agreements is limited, preference
shall be given to the establishment of account owner agreements with resident account
owners who are establishing accounts for resident beneficiaries.
(b)For tax years beginning on and after January 1, 2022, amounts that an account
owner deposits into an education savings account shall be exempt from inclusion in the
account owner's taxable income for the purposes of state individual income tax up to a
maximum of one thousand two hundred dollars per
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§3100.5. Education savings accounts; types, use, limitations, and disclosures
A.(1)(a) The authority may enter into an account owner's agreement with any person
who qualifies pursuant to R.S. 17:3100.6(A) for the creation of an education savings account
on behalf of a beneficiary. When the number of available agreements is limited, preference
shall be given to the establishment of account owner agreements with resident account
owners who are establishing accounts for resident beneficiaries.
(b) For tax years beginning on and after January 1, 2022, amounts that an account
owner deposits into an education savings account shall be exempt from inclusion in the
account owner's taxable income for the purposes of state individual income tax up to a
maximum of one thousand two hundred dollars per beneficiary per taxable year for account
owners filing single returns and up to a maximum of two thousand four hundred dollars per
beneficiary per taxable year for account owners filing joint returns, as provided in R.S.
47:293(9)(a)(xxv). If an account owner deposits less than the maximum one thousand two
hundred dollars per year in an owned account and files a single return or if married account
owners deposit less than the maximum of two thousand four hundred dollars per year in an
account or accounts for a beneficiary and file a joint return, the difference between the total
deposits and one thousand two hundred dollars or two thousand four hundred dollars,
respectively, shall roll over to subsequent years and shall be exempt from inclusion in the
account owner's taxable income for the purposes of state income tax in addition to the one
thousand two hundred dollars or two thousand four hundred dollars in the year actually
deposited, as provided in R.S. 47:293(9)(a)(xxv).
(c) The deduction provided for in Subparagraph (b) of this Paragraph shall not be
allowed for any deposits that are withdrawn within the same taxable year as the deposit.
(2) Disbursements from an education savings account shall be made from the
account to the account owner, beneficiary, or elementary or secondary school, as directed by
the account owner, for the qualified education expenses of the beneficiary not to exceed the
redemption value of the account. The amount of all disbursements from all education
savings accounts with respect to a beneficiary during any taxable year shall, in the aggregate,
include not more than ten thousand dollars in qualified education expenses incurred during
the taxable year.
(3) Nothing in this Chapter or in any education savings account owner's agreement
entered into pursuant to this Chapter shall be construed as a guarantee by the state, the
authority, or any elementary or secondary school that a beneficiary of such an account will
be admitted to such a school, or, upon admission to such a school, will be permitted to
continue to attend or will receive a diploma or any other affirmation of program completion
from the school. Nothing in this Chapter or in any education savings account owner's
agreement entered into pursuant to this Chapter shall be considered a guarantee that the
beneficiary's cost of tuition at an elementary or secondary school will be covered in full by
the proceeds of the beneficiary's education savings account.
(4) Subject to the limitation imposed by R.S. 17:3100.7(B), the authority shall
guarantee payment of the redemption value of an education savings account in which the
deposits and interest are invested in fixed earnings.
(5) Nothing in this Chapter or in any education savings account owner's agreement
entered into pursuant to this Chapter shall be construed as a guarantee of payment of the
redemption value of an education savings account by the state, the authority, or any
elementary or secondary school for deposits and interest invested in variable earnings.
B. The following information shall be disclosed in writing to each person completing
an account owner's agreement:
(1) The terms and conditions for opening, maintaining, terminating, or redeeming
an education savings account.
(2) Any restrictions on the substitution of another individual for the original
beneficiary.
(3) The person entitled to terminate the account owner's agreement.
(4) The terms and conditions under which the agreement may be terminated and the
amount of the refund, if any, to which the person terminating the agreement, or that person's
designee, is entitled upon termination.
(5) The obligation of the authority to make payments to a beneficiary, or an
elementary or secondary school on behalf of a beneficiary pursuant to Subsection A of this
Section, based upon the redemption value accrued on behalf of the beneficiary.
(6) The method by which withdrawals from the education savings account shall be
applied toward payment of qualified education expenses.
(7) The period of time during which the beneficiary may receive benefits under the
agreement.
(8) The terms and conditions under which money may be wholly or partially
withdrawn from the program.
(9) A clear statement that the act of establishing an education savings account
pursuant to this Chapter does not guarantee full payment of tuition on behalf of the
beneficiary.
(10) A clear statement of fees that may be imposed and collected and an estimate of
the amount of such fees for the two years following the establishment of an agreement.
(11) All other rights and obligations of the purchaser and the authority and any other
terms, conditions, and provisions the authority considers necessary and appropriate.
C. An education savings account owner's agreement may provide that the authority
shall pay directly to the elementary or secondary school in which the beneficiary is enrolled
the amount represented by the qualified education expenses incurred that term, subject to the
limitations provided in Paragraph (A)(2) of this Section.
D. Prior to the close of the calendar year in which the program is implemented and
each year thereafter on a date specified by the authority, the state treasurer shall determine
and report to the authority the total earnings and the rate of return achieved on deposits in the
Louisiana Education Tuition and Savings Fund. Based upon the fund's reported earnings,
the authority shall establish the rate of interest to be applied to the accumulated principal and
interest in education savings accounts of record, subject to approval by the state treasurer.
The authority shall calculate and credit the appropriate amount of interest earnings to each
such account prior to the close of the calendar year.
E. If the redemption value of an education savings account is in excess of the
maximum allowed to be saved pursuant to the provisions of 26 U.S.C. 529 as amended, the
excess value shall be treated in accordance with R.S. 17:3100.7.
F.(1) Checks and electronic funds transfers through the Automated Clearing House
Network, or its successor, received for deposit in a variable earnings option shall be invested
by the state treasurer in fixed earnings prior to the trade date. All earnings from such
investments from the beginning of the program shall be the property of the state and shall be
deposited in the Variable Earnings Transaction Fund.
(2) Any increase in the value of an account over the amount deposited shall be
forfeited by the account owner and deposited in the Variable Earnings Transaction Fund if
the deposit was used to purchase units in a variable earnings option and made by check or
Automated Clearing House Network a transfer that, subsequent to the trade date, was not
honored by the financial institution on which it was drawn.
(3) Any increase in the value of an account over the amount deposited shall be
forfeited by the account owner and deposited in the Variable Earnings Transaction Fund if
the account was invested in a variable earnings option and terminated within twelve months
of the date the account was opened.
(4) The monies in the Variable Earnings Transaction Fund shall be used by the
authority to pay a financial institution's charges and any loss in value between the purchase
and redemption of units in a variable earnings option resulting from a check deposit or
Automated Clearing House Network transfer that, subsequent to the trade date, is not
honored by the financial institution on which it was drawn.