pixel
Facebook Youtube

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 $19,000 ($38,000 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. 4
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. The Montana Department of Revenue has not yet determined whether expanded K-12 Expenses or Credentialing Expenses are qualified expenses for Montana state income tax purposes.
2 An eligible educational institution is a post-secondary institution that is eligible to participate in a student aid program administered by the U.S. Department of Education.
3 Section 529 defines a member of the family of the beneficiary as an individual who is related to the beneficiary as follows: a son, daughter, stepchild, or a descendant of any such person; a brother, sister, stepbrother, or stepsister; the father or mother, or an ancestor of either; a stepfather or stepmother; a son or daughter of a brother or sister; a brother or sister of the father or mother; a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law; the spouse of the beneficiary or the spouse of any individual described above; or a first cousin of the beneficiary. Gift or generation-skipping transfer taxes may apply. Please consult with your tax advisor for further information.
4 Achieve Montana account owners who are Montana residents are entitled up to a yearly $3,000 deduction to adjusted gross income per taxpayer, in computing their Montana State income tax, or $6,000 for those married, filing jointly, based on contributions to Achieve Montana. Contributions may be subject to recapture in certain circumstances, such as a federal non-qualified withdrawal, a rollover to another state’s 529 plan, 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.
5 Contributions may be subject to recapture in certain circumstances, such as a federal non-qualified withdrawal, rollovers to another state’s 529 plan, 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.