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Tax Benefits

Tax-Deferred Earnings

Your account earnings grow deferred from both federal and state taxes.

Federal and State Tax-Free Qualified Withdrawals:

When your child is ready for college, you can withdraw the money from your Achieve Montana account free from federal and Montana state income taxes if the money is used to pay for qualified higher education expenses.1

Gift and Estate Tax Benefits:

Individuals can invest up to $18,000 ($36,000 for married couples making a proper election) per beneficiary without incurring any federal gift-tax consequences provided you don’t make additional gifts to that beneficiary in the same year. In addition, “accelerated gifting” lets you contribute up to $90,000 per beneficiary in a single year ($180,000 for married couples making a proper election) and take advantage of five years’ worth of tax-free gifts at one time provided you don’t make additional gifts to that beneficiary for five years (Contributions are considered completed gifts to the beneficiary and are removed from your estate², but you, as the account owner, retain control.) For more information, consult your tax advisor or estate-planning attorney.

Special Tax Benefits for Montana Taxpayers:

Contributions you make to Achieve Montana may be eligible as a yearly deduction of up to $3,000 per taxpayer per year ($6,000 for those married, filing jointly) from adjusted gross income in computing Montana state income tax. To be eligible, the contribution must be made to your account, an account owned by your spouse, on an account owned by your child or stepchild if your child or stepchild is a Montana resident.3
1 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. A withdrawal used to pay tuition at a public, private, or religious elementary or secondary school is not subject to federal taxation.
2 In the event the contributor does not survive the five-year period, a pro-rated amount will revert back to the contributor’s taxable estate.
3 Contributions may be subject to recapture in certain circumstances, such as a federal non-qualified withdrawal, rollovers to another state’s 529 plan, a Roth IRA rollover, or a withdrawal from an account that was opened within one year prior to the date of the withdrawal, as described in the Program Description. (Recaptured Withdrawal). If the account owner is no longer a Montana resident at the time of a Recaptured Withdrawal, we may withhold the potential recapture tax from the Recaptured Withdrawal. 
For more information about Achieve Montana, call 877.486.9271 or download an Enrollment Kit. The Enrollment Kit includes a Program Description that discusses investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.
If you are not a Montana taxpayer, before investing in Achieve Montana, you should consider the benefits of your home state’s qualified tuition program. It may provide taxpayers with state tax and other benefits such as financial aid, scholarship funds and protection from creditors, that are only available through your home state’s qualified tuition program. You should also consult your financial, tax, or other advisor to learn how state-based benefits (or limitations) would apply to your specific circumstances. Tax and other penalties may apply to non-qualified withdrawals.
Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision. In addition, you should periodically assess, and if appropriate, adjust your Section 529 Plan investment choices with your time horizon, risk tolerance and investment objectives in mind.
Achieve Montana is sponsored by the State of Montana and administered by the Montana Board of Regents of Higher Education, as sole trustee of the Montana Family Education Savings Trust (Trust). Ascensus College Savings Recordkeeping Services, LLC serves as program manager and provides recordkeeping and administrative support services for Achieve Montana. Blackrock Fund Advisors, Dimensional Fund Advisors LP, Charles Schwab Investment Management, Inc., New York Life Insurance Company and the Vanguard Group, Inc. each provide investment management services for the underlying investments comprising Achieve Montana’s portfolios. Although some of the portfolios invest in mutual funds, they are not mutual funds. When you invest in Achieve Montana, you are purchasing portfolio units issued by the Trust. Except to the extent of the New York Life Insurance Company guarantee that is available for the Capital Preservation Portfolio and certain Year of Enrollment Portfolios, investment returns are not guaranteed, and you could lose money by investing in Achieve Montana. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.
Upromise is an optional service offered by Upromise, Inc., is separate from Achieve Montana, and is not affiliated with the State of Montana. Terms and conditions apply to the Upromise service. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. Transfers from Upromise to an Achieve Montana account are subject to a minimum amount. Go to upromise.com to learn more about Upromise. 
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