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Plan Details

Overview


What is a 529 college savings plan?

What is the MI 529 Advisor Plan?

Which state sponsors the MI 529 Advisor Plan?

Who is the Program Manager?

Who serves as the Program Administrator and Distributor?

Who is Allianz Global Investors?

Why should I choose the MI 529 Advisor Plan?

Do I have to use my savings at a Michigan college or university?

 

Investments


What are the investment options offered in the MI 529 Advisor Plan?

What Share Classes are available?

How often can I change how my account is invested?

Do I need to do anything as the beneficiary grows older if I am invested in an Age-Based option?

Where can I find a list and description of the portfolios' underlying mutual funds?

Will the percentages of the underlying Funds ever change?

Where do I find information on investment performance?

Will there ever be additional Investment Portfolios offered?

Does the Plan make any guarantees on returns?

 

Taxes


What are the income tax benefits associated with the MI 529 Advisor Plan?

Are contributions tax-deductible on a federal level?

Are there any disadvantages of the program regarding federal income tax?

What are the gift tax advantages of an account?

 

 


Who can open an account in the plan?

Who can be a beneficiary?

Can others open an account for the same beneficiary I have designated?

Can I open an account for an unborn child?

Can I change the beneficiary on my account?

What if my child (the Designated Beneficiary) does not go to college, or if the account assets exceed the Beneficiary's college costs?

Can the account owner be changed?

How much money do I need to open an account?

How much can I invest in an account?

What are the fees and expenses?

How do I open an Account?

Can I open an Account Online?

 

 


Contributions


What is the minimum additional contribution amount?

How do I make additional investments?

Where do I send contributions?

Can anyone contribute to my account?

Can I contribute to more than one 529 plan?

Can I view my account balance online?


Rollovers and Transfers


Can I move money from another 529 plan to this 529 plan?

Can I move money from an UGMA/UTMA account to this 529 plan?

Can I move money from a Coverdell Education Savings Account or a qualified U.S. savings bond?


Withdrawals


How can I use the money in my account?

Can I use my account to pay for any college?

What are qualified expenses?

What if I need the money for something else?

What if I move to another state?

 

 

Plan Details


Overview


What is a 529 college savings plan?

529 College Savings Plans are designed to help individuals and families save for college in a tax-advantaged way.  The plans are named for Section 529 of the Internal Revenue Code.


What is the MI 529 Advisor Plan?

The MI 529 Advisor Plan (the "Advisor Program") is a part of a college savings and investment Program designed to enable residents of the State to save and invest for qualified higher educational expenses of a child or other beneficiary on a tax-favored basis. Although sponsored under the laws of the State of Michigan and intended for residents of the State, the plan is available to all U.S. citizens and resident aliens with a valid Social Security or other taxpayer identification number.

The State of Michigan offers three 529 Plans that offer a Michigan Tax Deduction: Michigan Education Trust (MET prepaid plan), Michigan Education Savings Program (MESP Direct Program) and MI 529 Advisor Plan.


Which state sponsors the MI 529 Advisor Plan?

The Program has been issued by the State of Michigan and established under the laws of the State of Michigan.


Who is the Program Manager?

The Program is currently managed by TIAA-CREF Tuitions Financing Inc.


Who serves as the Program Administrator and Distributor?

Allianz Global Investors Distributors LLC
1633 Broadway
New York, NY 10019-7585

Toll-free phone numbers for Financial Advisors:
Allianz Sales Desk: 1-800-926-4456
Back office: 1-866-529-8818

 

Who is Allianz Global Investors?

Allianz Global Investors is a global asset management group committed to helping clients achieve sustainable success. We draw on the intellectual capital of our diverse family of investment managers—each with their own distinctive philosophy and culture—to provide clients with a choice of innovative investment solutions, including mutual funds, managed accounts, closed-end funds, 529 plans and retirement offerings. We are part of the Allianz Group, one of the world’s leading integrated financial services providers. Learn more about Allianz Global Investors.



Why should I choose the MI 529 Advisor Plan?

The MI 529 Plan has a variety of major benefits.  Some of the main benefits are:

  • Tax-deferred growth
  • Federal and Michigan income tax-free distributions for qualified higher education expenses*
  • State income tax deduction for Michigan residents**
  • Gift and estate tax benefits
  • Low minimum investment - only $25
  • Maintain control over assets
  • 19 investment options including 6 Age-Based Investment Portfolios, 2 Static Investment Portfolios, and 11 Individual Portfolios
  • Funds utilized are managed by Pacific Investment Management Company LLC (PIMCO), Allianz Global Investors U.S. LLC, NFJ Investment Group LLC (NFJ), & Teachers Advisors, Inc. (TIAA-CREF)

*If you use the money for any other purpose, including paying for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to applicable federal and state income tax and an additional 10% federal tax.

**If you are not a Michigan resident, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.



Do I have to use my savings at a Michigan college or university?

No. You can use your savings at any qualified higher education institution that participates in certain federal student aid programs. This may be a college or graduate or professional school, or a post-secondary vocational or trade school, private or public, in your state or out-of-state. You should be certain that the school is accredited. If you use the money for any other purpose, including paying for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to applicable federal and state income tax and an additional 10% federal tax.

 

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Investments

What are the investment options offered in the MI 529 Advisor Plan?

The plan offers a total of 19 investment options:

  • 6 Age-Based Investments – These portfolios automatically adjust as the beneficiary grows older.  The portfolios are primarily invested in return generating assets when the beneficiary is younger and in more defensive assets as the beneficiary grows older.
  • 2 Static Investment Portfolios ­– These portfolios are made up of a variety of underlying mutual funds that do not adjust based on the beneficiaries age.  Clients and their financial advisors can use these portfolios to adjust the risk associated with their Age-Based option or construct their own allocation.
  • 11 Individual Portfolios – These portfolios allow clients to invest directly in one of twelve underlying mutual funds from the following fund families: Pacific Investment Management Company LLC (PIMCO), Allianz Global Investors U.S. LLC, NFJ Investment Group LLC (NFJ), & Teachers Advisors, Inc. (TIAA-CREF).


For additional information surrounding the portfolios offered, please see the Plan Disclosure Statement.

 

 

What Share Classes are available?

Account Owners may allocate each contribution to one of several different classes of units in the selected Investment Portfolio, each of which has a different fee structure. The following Classes are available.

  • Class A Units (w/initial sales charge)
  • Class A Units (load waived for fee-based advisors and other exceptions – Please review the Plan Disclosure Statement for additional detail)
    Note: Trail paid to broker, but no commission or "finder's fee" applies.
  • Class C Units (asset-based sales charge)

 

How often can I change how my account is invested?

You may reallocate the existing assets in your Account - to one or more other Investment Portfolios only once every calendar year.

Alternatively, you may reallocate your investment options whenever you change the Account's Designated Beneficiary.

 

Do I need to do anything as the beneficiary grows older if I am invested in an Age-Based option?

The Age-Based Investment Portfolios offer a diversified group of six Investment Portfolios designed to emphasize total return (and particularly capital appreciation) when the Designated Beneficiary of an Account is younger and increasingly emphasizes preservation of capital and income as the Designated Beneficiary approaches and reaches college age (presumed to be at age 18).  The Age-Based options automatically adjust over time as your beneficiary ages, shifting from a larger weighting in return generating investments and moving towards a more significant weighting in defensive investments.

If you are invested in an Age-Based option, you do not have to do anything as your portfolio will automatically be shifted to the next portfolio.


Where can I find a list and description of the portfolios' underlying mutual funds?

Please refer to the Plan Disclosure Statement for additional information surrounding each underlying mutual fund.


Will the percentages of the underlying Funds ever change?

The percentage allocations and mutual funds in which the Investment Portfolios are invested (the "Underlying Funds") are subject to change from time to time in accordance with the Investment Policy.


Where do I find information on investment performance?

To obtain detailed information surrounding the performance of the portfolios offered in the MI 529 Advisor Plan, click on the performance tab located at the top of this page.


Will there ever be additional Investment Portfolios offered?

Additional Investment Portfolios may be established in the future. At the time you establish an Account, and at any time a subsequent contribution is made to the Account, you may select one or more of the Investment Portfolios and designate what portion of the contribution should be invested in each selected Investment Portfolio.


Does the Program make any guarantees on returns?

The Program does not guarantee that your Account will increase in value or achieve any rate of return, or that your Account will not decrease in value, or that the assets in your Account will be sufficient to pay the qualified higher education expenses of your Designated Beneficiary.

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Taxes

 

What are the income tax benefits associated with the MI 529 Advisor Plan?

  • Federal income tax-free. Any earnings on the money you invest in your Account will not be subject to federal income taxes before they are distributed. Any amounts in the Account that are withdrawn to pay for the Designated Beneficiary's qualified higher education expenses will not be subject to federal income tax. Qualified higher education expenses include tuition, fees, room, board, books, equipment and other supplies.
  • State income tax-free. For Michigan residents, earnings are exempt from Michigan income tax when used for qualified higher education expenses. Other states may also offer tax breaks for withdrawals from the MI 529 Advisor Plan. If you are not a resident of the State of Michigan, favorable tax treatment or other benefits may be offered by your home state with respect to qualified tuition programs. Clients who reside in the State's of Arizona, Kansas, Maine, Missouri, and Pennsylvania will also receive their State's Tax Deduction benefits for contributions to the MI 529 Advisor Plan. Any state-based benefit offered with respect to a particular qualified tuition program should be one of many appropriately weighted factors to be considered in making an investment decision. 
  • Michigan income tax deductibility. Michigan State law allows for contributions by State residents to the Advisor Plan, to be annually deducted from the contributor's State adjusted gross income for contributions up to $5,000 for single filers and $10,000 for joint filers.
  •  

Are contributions tax-deductible on a federal level?

No. Contributions are not tax-deductible on a federal level. Michigan residents can deduct contributions to the Plan from their State adjusted gross income for contributions up to $5,000 for single filers and $10,000 for joint filers.



Are there any disadvantages of the program regarding federal income tax?

There is one potential federal income tax disadvantage to the Program. Any earnings on your Account that are subject to federal income tax upon withdrawal (e.g., earnings withdrawn but not used to pay qualified higher education expenses) will be taxed to the Account Owner or Designated Beneficiary as ordinary income, rather than as capital gains, and may be subject to a federal 10% additional tax, if not used to pay for the Designated Beneficiary's qualified higher education expenses or otherwise exempted from such additional tax.

Earnings withdrawn for payment of one Designated Beneficiary's qualified higher education expenses generally are not excludable from gross income to the extent other federal tax credits and incentives are used for the same expenses. You are encouraged to consult your accountant, financial or tax advisor for a better understanding as to how the specific application of these tax rules apply to your particular circumstances.
Michigan residents benefit from the following tax deductions:

  • Allows up to $5,000 of contributions to be deducted from your Michigan taxable income annually ($10,000 for joint filers). The contributor need not be the Account Owner to qualify for the deduction however they must be a resident of the State of Michigan.
  • Contributions may be made up to December 31 to earn a deduction for the calendar year
  • Rollovers from other 529 college savings plans do not qualify for the Michigan tax deduction.

 

What are the gift tax advantages of an account?

Normally, a gift of more than $14,000 to a single person in one year is subject to federal gift tax. With the Program, an individual can potentially contribute up to $70,000 (and married couples can potentially contribute up to a total of $140,000) to an Account for a particular Designated Beneficiary in one year without triggering the tax. To do this the contributor must elect to treat the entire gift as a series of five equal annual gifts. The five-year prorating is elected by filing a gift tax return for the year in which the gift is made. If the Donor dies before the start of the fifth year, a portion of the contribution must be added back to the Donor's estate for tax purposes. You should consult with a tax advisor regarding the gift and estate tax consequences of contributing to (or making any other transaction with respect to) an account.

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Enrollment

 

Who can open an account in the plan?

The MI 529 Advisor Plan is open to any U.S. citizen or resident alien. In order to establish an account, you must have a valid Social Security or other taxpayer identification number and must have a valid U.S. residential address that is not a post office box. There are no income restrictions or state residency requirements for the MI 529 Advisor Plan.


Who can be a beneficiary?

You may open an Account for the benefit of any person who is a U.S. citizen or legal U.S. resident, with a social security or tax identification number, including yourself. Such person may be your child, your grandchild, your spouse, another relative, or even someone not related to you. The Designated Beneficiary may be of any age. However, the Designated Beneficiary must be an individual person. The MI 529 Advisor Plan is intended and designed for residents of the state of Michigan.


Can others open an account for the same beneficiary I have designated?

Yes. Other people can also open their own Accounts for the same Designated Beneficiary. The maximum contribution limit is $235,000 per beneficiary. This includes contributions to the MET prepaid program and the Direct program.


Can I open an account for an unborn child?

No. The beneficiary must have a Social Security or other taxpayer identification number.  If the beneficiary does not have a Social Security number you can open an account with yourself as the beneficiary and change the beneficiary to your child at a later time.


Can I change the beneficiary on my account?

You can change the beneficiary on your account at any time provided that the new beneficiary is an eligible "Member of the Family" defined in Section 529.  Under current law, a Member of the Family of a Designated Beneficiary is a person related to the Designated Beneficiary as follows:
• son or daughter, or a descendant of either (natural or legally-adopted);
• stepson or stepdaughter;
• brother, sister, stepbrother or stepsister;
• father or mother, or an ancestor of either;
• stepfather or stepmother;
• son or daughter of a brother or sister;
• brother or sister of the father or mother;
• son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law;
• spouse of the Designated Beneficiary or of any of the other foregoing individuals; or
• first cousin of the Designated Beneficiary.

Please see the Plan Disclosure Statement for additional information.


What if my child (the Designated Beneficiary) does not go to college, or if the account assets exceed the Beneficiary's college costs?

You can use the funds for the Designated Beneficiary's graduate or professional school expenses, designate a new beneficiary who is a member of the Designated Beneficiary's family or, subject to the imposition of federal income taxes and penalty, close the Account by withdrawing all the funds. You also may leave the Account open — indefinitely — until you determine the proper course of action. Note that the normal 10% federal penalty and tax on the earnings withdrawn and the obligation to add the deductions taken back into your Michigan taxable income is not assessed if you terminate the account because the beneficiary has died or is disabled, or if you withdraw funds not needed for college because the beneficiary has received a scholarship equal to or less than the amounts withdrawn.


Can the account owner be changed?

Yes, you can change the account owner on an account by completing the MI 529 Advisor Plan Change Form.


How much money do I need to open an account?

The minimum initial contribution to open an Account in the MI 529 Advisor Plan is $25 per Investment Portfolio. You may also contribute through an automatic investment plan (also known as "Auto-Invest").


How much can I invest in an account?

The maximum balance limit in effect is currently $235,000 per beneficiary including contributions to the MET Prepaid Plan and the MESP Direct Plan. Your account can continue to grow higher than $235,000, but you cannot make additional contributions once your balance reaches this level.

Federal income tax law applicable to the Program requires that the Program prohibit contributions in excess of what is necessary to provide for the qualified higher education expenses of the Designated Beneficiary. An additional contribution may not be made to your Account to the extent that the amount of the contribution, when added to the balance of all accounts for the same Designated Beneficiary under the MI 529 Advisor Plan or any other 529 plan sponsored by the State of Michigan, including the MET Prepaid Plan and the MESP Direct Plan, would exceed the maximum balance limit then in effect.


What are the fees and expenses?

Account Owners will bear expenses at the Program level and also the expenses of investing in the Underlying Funds.  For recent expenses of the Underlying Funds, please refer to the current Plan Disclosure Statement. Account Owners may select from among two available classes of Units, each with a different fee structure.  All fees and charges applicable are subject to change from time to time.

Asset-Based Fees. At the Program level, the Account will be subject to an Advisor Program Management Fee and certain other asset-based fees. Such fees paid by the Account are received by the Advisor Program Distributor and Administrator, Program Manager and the State of Michigan. The asset-based fees noted below for each class of Units are accrued daily and paid to the Program Distributor & Administrator monthly. A portion of the Program Management Fee is paid by the Program Distributor & Administrator to the Program Manager quarterly.

 

  Unit Class      
 

A

A

C

C

Fee Equity& Fixed Money Market Equity& Fixed Money Market
Program
Management Fee*

0.50%

0.50%

0.50%

0.50%
Servicing and Administrative Fee
0.25%

0.10%

0.08 – 0.15%

0.10%
Distribution Fee None None 0.25 – 0.50% None
State Administration Fee**
0.10%

0.10%

0.10%

0.10%

 

* A portion of the Program Management Fee is paid by the Program Distributor & Administrator to the Program Manager monthly.

** Paid directly to the State for administration of the MI 529 Advisor Plan.

 

Sales Charges. In addition to the asset-based fees, Account Owners investing in Class A (subject to certain exceptions) will pay an initial sales charge, all or a substantial portion of which will be paid to the Selling Institution through which Account Owner makes the investment. Account Owners with Class C Units and certain Account Owners with Class A Units will pay a deferred sales charge (also called a redemption fee) on all withdrawals made within twelve months of contribution for Class C Units and eighteen months of contribution for certain Account Owners with Class A Units.

 

Class A  
Initial Sales Charge (as a percentage of assets contributed)
Amount of Contribution Initial Sales Charge
$0 – $24,999 4.50%
$25,000 – $999,999 4.25%
$100,000 – $249,999 3.50%
$250,000 – $499,999* 2.50%
$500,000 – $999,999* 2.00%
$1,000,000 +* 0.00%**

 

There are no sales charges or CDSC associated with purchases in the PIMCO Government Money Market investment option. If an Account Owner exchanges Units of the PIMCO Government Money Market Portfolio on which the Account Owner did not incur an initial sales charge, an initial sales charge will apply to the Units of the Investment Portfolio being purchased through the exchange.

* The current Maximum Balance Limit is $235,000 per Designated Beneficiary and, therefore, contributions in amounts higher than such limit referenced above are applicable to more than one Account by the same Account Owner or other contributor.

** An Account Owner purchasing $1,000,000 or more of Class A Units will pay a CDSC if he or she sells Units for which no initial sales charges were paid within 18 months of buying them. The amount of the CDSC will be 1.00%, which will be deducted from the Net Asset Value or the purchase price of the Shares, whichever is lower. The CDSC is calculated from the day that the purchase is accepted. Any earnings on contributions are not subject to a CDSC. Each purchase of Units has its own CDSC period, and, upon a withdrawal, Units that are not subject to a CDSC are sold first.

 

 

Class C Units





Portfolio Type

Amount of Contribution
(maximum of $499,000)

CDSC

Equity & Fixed Income Portfolios
Any Amount
0.33 -0.65% for first 12 months
Money Market Any Amount None

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How do I open an Account?

You (the "Account Owner") may open an Account by contacting any broker or financial advisor authorized to place orders on your behalf for interests in the Trust (your "Advisor"). The broker dealer is required to have an approved agreement with Allianz Global Investors in order to participate. An Account is established by completing a MI 529 Advisor Plan Account Application and sending it together with a check to the Program's Transfer Agent (BFDS).


 

Can I open an Account Online?

Unfortunately, you cannot open an account online at this point in time.

 

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Account Maintenance FAQs


Contributions

 

What is the minimum additional contribution amount?

The minimum additional contribution is $25 per portfolio.

 


How do I make additional investments?

You may send money by check directly to the address listed on the account application, or ask your Advisor to do so, along with instructions on how to invest the contribution. You also may choose to make periodic contributions by automatic transfers from your bank account.


Where do I send contributions?

For accounts that are already established, you may send money by check payable to "MI 529 Advisor Plan" directly to:

Regular Mail:
MI 529 Advisor Plan
P.O. Box 55070
Boston, MA 02205-5070

Overnight Mail:
MI 529 Advisor Plan
c/o Boston Financial Data Services Inc.
30 Dan Road
Canton, MA 02021-2809

 

Can anyone contribute to my account?

Yes. Anyone may make contributions to your Account(s), although the investment of the contribution will be directed in accordance with your instructions. Another contributor will not retain any control over, or rights to, his or her contribution (or any other portion of the Account) after the contribution is made. The other contributor will not receive any statements or other information with respect to the contribution or the Account. Any such contribution may have income, gift, estate or generation-skipping transfer tax consequences. Any contributor (not just the Account owner) who is a Michigan resident may be entitled to deduct from their State adjusted gross income contributions of up to $5,000 for single filers, or $10,000 if joint filers, annually.


Can I contribute to more than one 529 plan?

There is no limit to the number of accounts a participant or beneficiary may have. In fact, participants and beneficiaries may have multiple accounts in multiple states.


Can I view my account balance online?

Yes, Account Owners and their Advisors can view current balances and recent transactions online. Click on the Account Access link at the top of this page to log on.

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Rollovers and Transfers 


Can I move money from another 529 plan to this 529 plan?

Yes. You may transfer funds from another qualified tuition program to your Account. In order to avoid federal income tax consequences, you must transfer such funds into the Account within 60 days after you have withdrawn the funds from the other qualified tuition program. In addition, the Designated Beneficiary of the Account to which the funds are transferred must be a person who is a Member of the Family of the beneficiary of the account from which the transfer is made. You may also transfer Funds from an account in another qualified tuition program for the benefit of the same Designated Beneficiary without tax or penalty, so long as such transfer does not occur within 12 months from the date of a previous transfer to any qualified tuition program for the same Designated Beneficiary. Contact your financial or tax advisor or the Plan Administrator for more information about how to complete such a transfer.

Please note: The Direct Program is not considered "another qualified tuition program" for purposes of these rules, and any direct transfer between the Direct Program and the Advisor Program would be considered an investment reallocation (either with or without a change of beneficiary) for tax purposes and for purposes of the once-per-calendar-year limitation on investment reallocations without a change of beneficiary. (Note: Transfers from the Direct Program, reallocation from an existing Advisor Program Investment Portfolio, or a rollover from another qualified tuition program will not entitle the Account Owner or contributor to a State tax deduction to the extent already taken) The qualified tuition program from which you are transferring funds may impose other restrictions on such a rollover, so you should investigate this alternative thoroughly before you request a rollover.

You also may transfer funds from your Account to an account in another qualified tuition program established under Section 529. In order to avoid federal income tax consequences, you must transfer such funds into the account within 60 days after you have withdrawn the funds from your Account. In addition, the beneficiary of the account in the other qualified tuition program must be a Member of the Family of your Account's Designated Beneficiary. You may also transfer funds to an account in another qualified tuition program for the benefit of the same Designated Beneficiary without federal income tax consequences so long as such transfer does not occur within 12 months from the date of a previous transfer to any qualified tuition program for the same Designated Beneficiary.

Note: A State taxpayer who makes a rollover within one year of the date of contribution for which a deduction has been taken must include the amount of the rollover in their State adjusted gross income for the tax year of the rollover.

 

Can I move money from an UGMA/UTMA account to this 529 plan?

Yes. You can use money from a Uniform Gifts/Transfers to Minors (UGMA/UTMA) account to open a MI 529 Advisor Plan. Please keep in mind that you may incur capital gains taxes from the sale of the assets currently held in the UGMA/UTMA account.

Other restrictions may apply to these accounts. You should consult with your financial advisor or qualified tax professional before redeeming any assets from a UGMA/UTMA account.



Can I move money from a Coverdell Education Savings Account or a qualified U.S. savings bond?

Yes. You can contribute to the MI 529 Advisor Plan using proceeds from the sale of a Coverdell Education Savings Account (formerly known as an Education IRA).  You can also use proceeds from the redemption of a qualified U.S. savings bond.

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Withdrawals 


How can I use the money in my account?

You can use the money in the account when needed to pay for the "qualified higher education expenses," as defined in Section 529 of the Internal Revenue Code of 1986 ("Section 529"), of the person who is the Designated Beneficiary of the account.


Can I use my account to pay for any college?

Yes. You can get the full benefits from the Program if your Designated Beneficiary attends any qualified higher education institution that participates in certain federal student aid programs. This might be a college or graduate or professional school, or a post-secondary vocational or trade school, private or public, in your state or out-of-state.

You should be certain that the school is accredited. If you use the money to pay for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to federal income tax and a federal 10% penalty.

To learn more about eligible and accredited educational institutions, visit www.savingforcollege.com.



What are qualified expenses?

In general, tuition, fees, room, board, books, equipment and supplies necessary to attend an institution of higher education are considered qualified higher education expenses. Qualified higher education expenses also include expenses of a special needs beneficiary that are necessary in connection with his or her enrollment or attendance at a qualified higher education institution as defined in the Code.

 

What if I need the money for something else?

You can withdraw all or any portion of the money in the account at any time for any purpose. If you use the money for any other purpose, including paying for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to applicable federal and state income tax and an additional 10% federal tax.

Please note for Michigan Income tax purposes: a taxpayer that executes a Non-Qualified Withdrawal will be required to include the amount of such Non-Qualified Withdrawal, for which a contribution deduction was received, and any earnings thereon, as adjusted gross income in the taxable year of the Non-Qualified Withdrawal.


What if I move to another state?

You can still maintain and continue to your account regardless of where you live in the United States. However, if you're a Michigan resident and move out of state, you'll no longer be eligible to deduct your contributions for Michigan income tax purposes.

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