Illinois adopts tax recapture rule

Illinois Governor Quinn has signed a bill (SB 81) that requires the recapture of amounts previously deducted from Illinois taxable income for contributions to an Illinois 529 plan if a nonqualified withdrawal or refund is taken from the plan. The new rule is effective as of January 1, 2009. There is an exception for nonqualified withdrawals made as a result of the beneficiary's death or disability.
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