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If you are a North Carolina taxpayer, you may be eligible for a
state income tax deduction. Deduction Details
If you are not a North Carolina taxpayer, you should consider
before investing whether your or the beneficiary's home state offers a
qualified tuition program that provides its taxpayers with favorable
state tax and other benefits that may only be available through
investment in the home state's qualified tuition program. You also
should consult your financial, tax, or other adviser to learn more
about how state-based benefits (or any limitations) would apply to
your specific circumstances. You also may wish to contact directly
your home state's qualified tuition program(s), or any other qualified
tuition program, to learn more about those plans' features, benefits
and limitations. Keep in mind that state-based benefits should be one
of many factors to be appropriately weighed when making an
investment decision.
The features of a qualified tuition program are complex and
involve significant tax issues. The earnings portion of withdrawals
not used for qualified higher education expenses are subject to
federal income tax and a 10% federal penalty tax, as well as state and
local income taxes. The availability of tax benefits may be contingent
on meeting other requirements.
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