1. For federal income tax purposes, the Iowa educational savings plan trust shall be considered a qualified state tuition program exempt from taxation pursuant to section 529 of the Internal Revenue Code. The Iowa educational savings plan trust meets the requirements of section 529(b), of the Internal Revenue Code, as follows:

 a. Pursuant to section 12D.3, subsection 1, a participant may make contributions to an account which is established for the purpose of meeting the qualified education expenses of the designated beneficiary of the account.
 b. Pursuant to section 12D.3, subsection 1, a maximum contribution level is established.
 c. Pursuant to section 12D.4, subsection 1, paragraph “b”, a separate account is established for each beneficiary.
 d. Pursuant to section 12D.4, subsection 1, paragraph “c”, contributions may only be made in the form of cash.
 e. Pursuant to section 12D.4, subsection 1, paragraph “d”, a participant or beneficiary shall not provide investment direction regarding program contributions or earnings held by the trust.
 f. Pursuant to section 12D.6, subsection 6, a participant shall not pledge any interest in the trust as security for a loan.

Terms Used In Iowa Code 12D.9

  • Beneficiary: means the individual designated by a participation agreement to benefit from advance payments of qualified education expenses on behalf of the beneficiary. See Iowa Code 12D.1
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Participant: means an individual, individual's legal representative, trust, estate, or an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code, that has entered into a participation agreement under this chapter for the advance payment of qualified education expenses on behalf of a beneficiary. See Iowa Code 12D.1
  • Qualified education expenses: includes expenses for the participation in an apprenticeship program registered and certified with the United States secretary of labor under section 1 of the National Apprenticeship Act, 29 U. See Iowa Code 12D.1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
  • trust: means the trust created under section 12D. See Iowa Code 12D.1
  • Tuition: means the quarter, semester, or annual charges imposed to attend a qualified educational institution and required as a condition of enrollment or attendance. See Iowa Code 12D.1
 2. State income tax treatment of the Iowa educational savings plan trust shall be as provided in section 422.7, subsections 11, 22, and 23.
 3. State inheritance tax treatment of interests in Iowa educational savings plans shall be as provided in section 450.4, subsection 8. This subsection shall apply to all Iowa educational savings plans existing on or after July 1, 1998.
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