This 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 be considered 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 previous references to January 1, 2020.

The bill also includes provisions for the administration of the Arkansas Brighter Future Fund Plan, ensuring compliance with federal regulations. It clarifies the tax implications for contributions, qualified withdrawals, and nonqualified withdrawals from the fund, maintaining exemptions from Arkansas income tax for qualified distributions. The changes aim to enhance the attractiveness of the Arkansas Brighter Future Fund Plan by providing clearer tax benefits and aligning state law with federal standards, thereby encouraging savings for higher education.

Statutes affected:
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)
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)
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)