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Bill

HB 1001

update a reference to the Internal Revenue Code for purposes of higher education savings plans.

2025 Regular Session

HB 1001 updates South Dakota law to align higher education savings plan rules with current federal Internal Revenue Code provisions, ensuring tax-advantaged 529 plan compliance.

Signed by the Governor on 2025-03-13 H.J. 542
#education #executive/judiciaryrequest #highereducation
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Bill Summary · HB 1001

Legislative bill overview

HB 1001 updates South Dakota's higher education savings plan statutes to reference the current Internal Revenue Code provisions governing 529 college savings plans. The bill aligns state law with federal tax code changes to ensure South Dakota's education savings incentives remain compliant and functional.

Why is this important

529 plans are tax-advantaged savings vehicles used by families to fund education expenses. Outdated IRC references can create legal ambiguity, disqualify accounts from tax benefits, or leave account holders exposed to unexpected tax liability. Keeping state law synchronized with federal code changes ensures consistent treatment of these savings vehicles and protects taxpayers' investments.

Potential points of contention

  • Technical nature obscures substantive changes: Without seeing the specific IRC sections referenced, the bill's actual scope is unclear—it could be a minor housekeeping update or reflect significant federal law changes affecting plan eligibility
  • Timing of federal-state alignment: Delays in updating references can create periods where state and federal treatment diverge, potentially creating confusion or unequal treatment for account holders
  • Retroactive application concerns: Depending on implementation, the update could affect existing accounts, raising fairness questions for those who made savings decisions under prior law

Compiled from official sources — confirm details with the bill’s official record.

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