Private schools throughout Franklin County will benefit from changes to the federal tax code.
The Tax Cuts and Jobs Act law allows parents and guardians to make contributions to a child’s Missouri 529 MOST account for primary and secondary school tuition, in addition to saving for college.
The account is an investment program sponsored by the Missouri State Treasurer’s office. Anyone can open a MOST account, including parents, grandparents, or friends of K-12 or college-aged students.
If parents lack financial resources for education, others can contribute to the family’s account.
Becky Tucker, principal at Immaculate Conception School, Union, said the plan is “a wonderful tax shelter” for educational expenses.
“This opportunity may make private education more attainable for many families,” she said.
St. Francis Borgia Regional High School Director of Admissions and Marketing Moira Vossbrink said she expects an enrollment increase from the new opportunity. She believes the tax benefit provides families an opportunity to send their children to private schools like Borgia.
“We have many families who work hard and struggle to pay tuition,” she said. “We are able to offer tuition assistance to over 50 percent of our families, but we see this tax benefit as a way to offer assistance to all of our families.
“To me, this also serves as an incentive to families who are looking for an alternative to public education,” she added. “We are hoping more families will consider Borgia as an option for their children.”
Father Kevin Schmittgens, St. Francis Borgia Regional High School president, said the tax benefit will lighten the financial load on parents who seek Catholic schooling for their children.
“We are excited that this allows a little relief for our parents,” Father Schmittgens said. “It’s a way for parents who choose Catholic education to better afford the program that we offer.”
St. John-Gildehaus School Principal Gary Menke said the tax benefit is “good news” for his parents and he’s trying to get information about the changes in front of parents as soon as he can.
“As far as enrollment and registration are concerned, our door is open and we’re hopeful that our enrollment could see some increases not only for this but also because of the program we offer,” Menke said.
Interest earnings on contributions made by parents to MOST accounts are not subject to state or federal taxes.
Qualified distributions from the account are not taxed either.
Parents can withdraw up to $10,000 annually for private K-12 tuition per student as an eligible distribution from a MOST account.
Funds contributed to a MOST account are deducted from the taxable income.
For example, if a Catholic school parent contributes $5,000 during the year to their child’s MOST account, $5,000 will be deducted from their taxable income for state tax purposes.
Larger contributions to MOST accounts will further reduce taxable income.
Reducing taxable income, in turn, will reduce the state tax bill parents pay.
The Missourian also reached out to Our Lady of Lourdes, Washington; St. Gertrude School, Krakow; St. Bridget of Kildare, Pacific; and St. Clare Catholic School, St. Clair; but representatives were unavailable for comment before press deadline.
Union Missourian Editor Karen Butterfield and Staff Writer Kavahn Mansouri contributed to this article.