Montana Code 53-25-110. Qualified and nonqualified withdrawals — rulemaking
53-25-110. Qualified and nonqualified withdrawals — rulemaking. (1) A designated beneficiary or agent may withdraw all or part of the balance from an account under rules prescribed by the department. The rules must be used to help the department or program administrator to determine whether a withdrawal is a nonqualified withdrawal or a qualified withdrawal to the extent that the department concludes that it is necessary for the department or program administrator to make that determination.
Terms Used In Montana Code 53-25-110
- Account: means an eligible participating account established under this chapter by or on behalf of an eligible individual. See Montana Code 53-25-103
- Agent: means one of the following persons acting on behalf of a designated beneficiary:
(a)a person acting under a power of attorney; or
(b)if no person holds a power of attorney, a parent or legal guardian of the designated beneficiary. See Montana Code 53-25-103
- 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
- Department: means the department of public health and human services provided for in 2-15-2201. See Montana Code 53-25-103
- Designated beneficiary: means the eligible individual on whose behalf an account is established. See Montana Code 53-25-103
- Nonqualified withdrawal: means a withdrawal from the account that is not:
(a)a qualified withdrawal;
(b)a withdrawal made as the result of the death of the designated beneficiary of an account; or
(c)a rollover distribution or a change of designated beneficiary described in 53-25-111. See Montana Code 53-25-103
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Program: means the Montana achieving a better life experience program provided for in this chapter and authorized under section 529A of the Internal Revenue Code, 26 U. See Montana Code 53-25-103
- Program administrator: means the person appointed or contracted by the department to administer the daily operations of the program and provide marketing, recordkeeping, investment management, and other services for the program. See Montana Code 53-25-103
- Qualified withdrawal: means a withdrawal from an account to pay the qualified disability expenses of the designated beneficiary of the account. See Montana Code 53-25-103
(2)Upon the death of a designated beneficiary, any amount remaining in the account must be distributed pursuant to section 529A(f) of the Internal Revenue Code, 26 U.S.C. § 529A(f).
(3)A designated beneficiary or agent may request a nonqualified withdrawal at any time. Nonqualified withdrawals are subject to a federal additional tax pursuant to section 529A of the Internal Revenue Code, 26 U.S.C. § 529A.
(4)If a distribution is made from an account to any person or for the benefit of any person during a calendar year, the distribution must be reported to the internal revenue service and to the designated beneficiary or agent to the extent required by federal law.