Notwithstanding any other law, the amount of any distribution to a designated beneficiary, as defined in section 529(e)(1) of the internal revenue code, from an individual trust account or savings account established under this article is exempt from taxation under title 43 but only to the extent that this income is used to pay qualified higher education expenses of the designated beneficiary.

Terms Used In Arizona Laws 15-1876

  • Account: means an individual trust account in the fund that is established as prescribed in this article. See Arizona Laws 15-1871
  • 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
  • Designated beneficiary: means a person who qualifies as a designated beneficiary under section 529 of the internal revenue code and, except as provided in section 15-1875, subsections P and Q, with respect to an account, who is designated at the time the account is opened as the person whose qualified higher education expenses are expected to be paid from the account or, if this designated beneficiary is replaced in accordance with section 15-1875, subsections D, E and F, the replacement beneficiary. See Arizona Laws 15-1871
  • Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
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