House Bill 551 Summary

• Revises the definition of "nonqualified withdrawal" to mean any withdrawal from a college savings account that is subject to additional tax under the Internal Revenue Code, excluding qualified withdrawals, death/disability withdrawals, scholarship withdrawals, and rollovers.

• Clarifies that minors may open college savings accounts with board approval and that such accounts cannot be disaffirmed under Idaho law.

• Changes taxation liability so that designated beneficiaries are taxed only on nonqualified withdrawals (rather than qualified withdrawals) from college savings accounts established under Idaho Code chapter 33.

• Requires the state college savings program board to review quarterly reports from financial institutions and establish procedures to prevent excess contributions across all qualified tuition programs for a single beneficiary.

• Declares an emergency and provides retroactive application of all provisions to January 1, 2020.