SECTION 358.388. Tuition Savings Programs

(a) The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.

(1) Tuition savings program--

(A) a prepaid tuition program or higher education savings plan authorized under Chapter 54, Subchapter G, H, or I of the Texas Education Code; or

(B) a qualified tuition program of any state that meets the requirements of §529 of the Internal Revenue Service Code of 1986.

(2) Beneficiary--A designated individual whose qualified higher education expenses are expected to be paid from a tuition savings program.

(b) The Texas Health and Human Services Commission excludes funds used to establish a tuition savings program and payments made from or interest earned on a tuition savings program, if the tuition savings program was established:

(1) before the beneficiary's 21st birthday; and

(2) by the beneficiary's parent, stepparent, spouse, grandparent, brother, sister, uncle, or aunt, whether related by whole blood, half blood, or adoption.

(c) The income exclusion described in subsection (b) of this section does not apply:

(1) to a person in the institutional special income limit coverage group described in §358.107(c)(2) of this chapter (relating to Coverage Groups);

(2) if a withdrawal from the tuition savings program is made for any purpose other than paying qualified educational expenses of the beneficiary; or

(3) if the tuition savings program is cancelled.

Source Note: The provisions of this §358.388 adopted to be effective February 3, 2013, 38 TexReg 365