The bill amends the Arkansas Brighter Future Fund Plan Act to align state law with recent changes in federal law regarding tax-deferred tuition savings programs. Key updates include the adoption of federal provisions concerning the income tax treatment of distributions and rollover contributions from the Arkansas Brighter Future Fund Plan to Roth Individual Retirement Accounts (IRAs). The bill specifies that rollovers to Roth IRAs will qualify as tax-free distributions under federal law, effective from January 1, 2024. Additionally, the bill updates various definitions and provisions to reflect the new effective date of January 1, 2024, replacing the previous date of January 1, 2020.

The legislation also includes provisions for the administration of the Arkansas Brighter Future Fund Plan by the Section 529 Plan Review Committee, ensuring compliance with federal regulations. It clarifies the tax implications for contributions, withdrawals, and rollovers, including the exemption of qualified withdrawals and rollovers from Arkansas income tax. The bill aims to enhance the state's tuition savings program by providing clearer guidelines and aligning with federal standards, ultimately benefiting account owners and designated beneficiaries.

Statutes affected:
Old version HB1085 V2 - 1-29-2025 09:00 AM: 6-84-102, 01-29-2025, 6-84-103(5), 6-84-103(10), 6-84-103(12), 6-84-103(14), 6-84-103(17), 6-84-103, 6-84-105(b), 6-84-105(c), 6-84-106, 6-84-108(b), 6-84-109(b), 6-84-111(a), 6-84-111(b), 6-84-111(c), 6-84-113, 26-51-414(b)
Old version HB1085 Original - 1-13-2025 02:17 PM: 6-84-102, 6-84-103(5), 6-84-103(10), 6-84-103(12), 6-84-103(14), 6-84-103(17), 6-84-103, 6-84-105(b), 6-84-105(c), 6-84-106, 6-84-108(b), 6-84-109(b), 6-84-111(a), 6-84-111(b), 6-84-111(c), 6-84-113, 26-51-414(b)
HB 1085: 6-84-102, 6-84-103(5), 6-84-103(10), 6-84-103(12), 6-84-103(14), 6-84-103(17), 6-84-103, 6-84-105(b), 6-84-105(c), 6-84-106, 6-84-108(b), 6-84-109(b), 6-84-111(a), 6-84-111(b), 6-84-111(c), 6-84-113, 26-51-414(b)
Act 802: 6-84-102, 01-29-2025, 6-84-103(5), 6-84-103(10), 6-84-103(12), 6-84-103(14), 6-84-103(17), 6-84-103, 6-84-105(b), 6-84-105(c), 6-84-106, 6-84-108(b), 6-84-109(b), 6-84-111(a), 6-84-111(b), 6-84-111(c), 6-84-113, 26-51-414(b)