Benefit

Deposits

You may exclude up to $3,000 of your contribution per year ($6,000 for those married, filing jointly) in computing Montana state income tax.

Withdrawals and Earnings

Withdrawals of contributions and earnings from an education savings account are not taxable to you if you withdraw them to pay for qualified higher educational expenses of the designated beneficiary.

Eligibility

The exclusion is allowed for:

• Contributions that you make to an FESA owned by you or jointly with your spouse.
• Contributions you make to an FESA owned by your child or stepchild if your child or stepchild is a Montana resident. It does not matter if the designated beneficiary of the account is:Earnings on the account to the extent that, when distributed, they are used to pay for qualified higher education expenses.
  • The contributor’s adult child or step-child;
  • A grandchild or other relative of the contributor;
  • Related to the account owner; or
  • A resident or nonresident.

You can only claim the exclusion for the tax year the contribution is made.

Qualified Expenses

Qualified higher education expenses include:

• Tuition
• Mandatory fees
• Books, supplies, and equipment required for enrollment or attendance
• Certain room and board costs