FAST Financial Aid for Student Tuition. This service analyses family eligibility for scholarship amount. Once the analysis is complete, FAST will recommend a scholarship amount for the family to use as reference, particularly for the Hidden Treasure scholarship. Signup online via link at our website: hiddentreasure.org. (Fee: $53)
HTS Hidden Treasure Scholarship. A scholarship amount available from Hidden Treasure scholarship funds received. This is money from our year-round fundraising efforts at Hidden Treasure.
SFO Scholarship Funding Organization. A privately-funded scholarship for special needs families. Parents may signup online via link at our website: hiddentreasure.org or at exceptionalsc.org. (As a privately-funded scholarship program, note that individuals and corporations can contribute to this fund for tax benefit. See exceptionalsc.org for additional details.)
PARENT TAX CREDIT (TC-57A) Parents document that they have paid up to $11,000 toward their Special Needs student. This SCDOR tax credit award (currently up to $11,000) is available on first/come, first served basis. Families approved for this tax credit will receive a notice from the SCDOR. Parents report the TENTATIVELY approved parental refundable tax credit on Form I-361. Questions: exceptionalSC@dor.sc.gov or 803-898-5706. (NOTE: SFO and PTC received cannot exceed a total of $11,000. For example, if your student received $10,000 tuition scholarship, you can still apply for $1,000 in PTC)
529 educational savings account
(Qualified Tuition Program)
529 programs are educational savings accounts that allow contributions to be invested without any tax on investment gains or income if the funds are used for qualified educational expenses. Accounts can be set up by almost anyone. The recipients (beneficiaries) can be any student and the beneficiaries can be changed as often as necessary. Even the contributor can be a beneficiary. Originally the funds could only be used for higher education, but with the passage of tax reform in 2018, up to 10K per student, per calendar year can be used for attendance at a private K-12 school. In addition to the tax savings on the investment gains, SC offers an unlimited state tax deduction for contributions to SC 529 plans. The SC version of the 529 plan is called Future Scholar (www.futurescholar.com ). Where to open? Any bank, investment firm or online.
ABLE PROGRAMS
ABLE accounts function in the same manner that 529 plans do, allowing tax-free investment gains /income, and a state tax deduction but the contributions can be used for any disability-related expenses. The list is long and can be found on the website www.palmettoable.com. There are no limits on the amount you can withdraw for eligible expenses, but contributions are limited to 15K a year.
Coordination between 529 and ABLE accounts and government benefits
While the 529 contributions are unlimited, each dollar contributed to the 529 accounts reduces the 15K maximum that you can contribute to the ABLE account the same year. However, 529 account balances can be rolled into ABLE accounts. One strategy to employ for special needs students in SC is to put as much money into the 529 plan while the beneficiary is a student and then when they are no longer in school, roll the balances into an ABLE account each year up to the maximum 15K a year to cover disability-related expenses. One great benefit is that amounts in ABLE accounts are not included when determining eligibility for SS, Medicare and other government programs. Neither are 529 balances included. The only caveat is that if the ABLE beneficiary dies, the funds are subject to Medicare reimbursement.
The following professionals have offered to help parents with these accounts: Dan Egerdahl (Edward Jones Financial Advisor
(864-255-5014) and Joseph Smith (TravelTax 402-379-7818 info@traveltax.com)