Only Homo Sapiens Need Apply for New 529 College Savings Tax Break

Tax Tips

Only Homo Sapiens Need Apply for New 529 College Savings Tax Break

But you don’t have to wait for Congress to act to open a tax-advantaged plan to save for an unborn child or grandchild’s college education.

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You have to give the men and women who write our tax laws credit. They are very careful when writing legislative language to leave no room for misunderstanding.

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Take, for example, the provision in the big tax legislation dropped on Thursday that would allow an unborn child to be named beneficiary of a 529 college-savings plan. Those tax-advantaged plans let parents, grandparents or other generous souls contribute money to a special account in which the money grows tax-deferred and can be withdrawn tax-free to cover the child’s college bills.

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To make sure they weren’t opening a loophole that might allow an account to be opened in the name of an unborn kitten or puppy or ferret or (cue the X Files theme) an honest-to-god alien, the legislation specifically defines unborn child as a “child in utero.” It then goes on to define child in utero as: “a member of the species homo sapiens, at any stage of development, who is carried in the womb.”

(We are not making this up.)


The inclusion of this language has become one of many lightning rods in the tax legislation, as it is seen as taking sides in the heated debate over when life begins.

It’s not our job to wade into the political and cultural wars.

But we do feel it is important to alert readers that the law already allows you to open a 529 to benefit an unborn child, or even a yet-to-be conceived child. As owner of the account, you can name yourself (or anyone else with a Social Security number) as the beneficiary. Then, as soon as the child is born and has a Social Security number, name him or her as the beneficiary.

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