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Rule Title: VERIFICATION OF FAMILY EDUCATION SAVINGS PROGRAM ACCOUNT CONTRIBUTIONS AND WITHDRAWALS
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Department: REVENUE
Chapter: INCOME TAX
Subchapter: Family Education Savings Act
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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42.15.804    VERIFICATION OF FAMILY EDUCATION SAVINGS PROGRAM ACCOUNT CONTRIBUTIONS AND WITHDRAWALS

(1) Each program manager shall provide to the department for each tax year a report identifying all contributions made during such year to family education savings accounts for which the account owner is, or was at the time the account was opened, a Montana resident. Such report shall be in an electronic form that may be sorted by names and social security numbers and shall be submitted within two months following the close of the year. The form shall include for each contributor and designated beneficiary the following:

(a) full name;

(b) last reported address;

(c) amount of the contributions; and

(d) social security number.

(2) Each program manager shall provide to the department for each tax year a report identifying all withdrawals made during such year from family education savings accounts during such year for which the account owner is, or was at the time the account was opened, a Montana resident. Such report shall be in electronic form that may be sorted by names and social security numbers of the account owners and the distributees, and shall be submitted within two months following the close of the year. The report shall include for each account owner and distributee the following:

(a) full name;

(b) last reported address;

(c) amount of the withdrawals (and to the extent that internal revenue service requires such information with respect to withdrawals, the portion constituting contributions and the portion constituting earnings);

(d) social security number; and

(e) in the case of the account owner, a notation as to whether the distribution is an early withdrawal. 

(3) At the request of the department, each program manager shall provide to the department copies of any other reports about accounts that it provides to either the internal revenue service or the Montana board of regents. These reports shall contain the same information and be provided in the same format as those provided to either the internal revenue service or the Montana board of regents.

(4) For purposes of this section, a program manager shall report a withdrawal as an early withdrawal if the withdrawal is made within three years of the date that the account was opened (unless the account was opened before April 1, 2001).

(5) A program manager shall withhold the potential recapture tax from any potentially recoverable withdrawal from an account that was at any time owned by a resident of Montana but that at the time of the withdrawal is not owned by a person who is a resident of Montana. For purposes of this provision, the program manager shall be entitled to assume that the account owner's address is the last address that the account owner reported to the program manager.

(6) Any potential recapture tax that is withheld shall be paid to the department not later than the last day of the month following the month in which such withholding occurred. A program manager shall have no liability to the department for failure to withhold potential recapture tax if such error was made in good faith.

(7) A taxpayer who desires to make a potentially recoverable withdrawal for which withholding would be required may petition the department to determine the proper amount of the potential recapture tax. The petition shall include all facts relevant to the proposed withdrawal, including information about the account and other accounts owned by the taxpayer and evidence to show that all or a portion of the contributions component of the potentially recoverable withdrawal is not attributable to deductible contributions. If the department is satisfied with the evidence, it shall issue a letter determining the potential recapture tax to be withheld by the program manager.

History: 15-30-2620, 15-62-201, MCA; IMP, 15-30-2110, 15-62-201, 15-62-208, MCA; NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10.


 

 
MAR Notices Effective From Effective To History Notes
42-2-820 4/30/2010 Current History: 15-30-2620, 15-62-201, MCA; IMP, 15-30-2110, 15-62-201, 15-62-208, MCA; NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10.
4/23/2004 4/30/2010 History: Sec. 15-30-305 and 15-62-201, MCA; IMP, Sec. 15-30-111, 15-62-201, and 15-62-208, MCA; NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04.
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