Family Education Savings Account Deposits and Earnings You can subtract the lesser of the contributions that you made during 2018 to one or more Montana Family Education Savings Accounts or $3,000.
If you are married, both you and your spouse can exclude up to $3,000 for contributions that you made to one or more Education Savings Accounts. This exclusion is allowed for contributions that you make to an Education Savings Account that is owned by you or jointly with your spouse. As part of your exclusion, you may also be able to include amounts that you use to establish a Montana family Education Savings Account (under the Montana Uniform Transfers to Minors Act or another state’s Uniform Gifts to Minors Act) for your child or stepchild if your child or stepchild is a Montana resident.
Withdrawals of your contributions and earnings from an Education Savings Account are not taxable to you if you withdraw them to pay for qualified higher educational expenses defined under federal law. If you withdraw these contributions for purposes other than to pay for qualified higher educational expenses, they are subject to a recapture tax of 6.9 percent, which should be reported on Tax Liability Schedule, line 1.
To establish your Montana Family Education Savings Account or for additional information, call the Achieve Montana Program at (877) 486-9271 or visit achievemontana.com.
Contributions to another state’s 529 College Savings Plan may qualify for the deduction. The rules for which contributions to the Montana Family Education Savings Program qualify for the deduction apply to these contributions as well. Please note, contributions to a state’s prepaid tuition plan do not qualify. The department may ask for a copy of any statement(s) from the plan administrator after you file your return.
Caution: Taxpayers who are using funds from their Family Education Savings Account to pay for K-12 education have to pay recapture tax on any amount withdrawn that was deducted on prior returns. Expenses for K-12 education are not qualified education expenses for the purpose of the Montana Family Education Savings accounts program.