A Difference Between a Section 529 Plan and an Educational

question 18

Multiple Choice

A difference between a Section 529 Plan and an Educational Savings Account is that:

• A)The contributions to a Section 529 Plan are not deductible while contributions to an Educational Savings Account are deductible.
• B)The maximum contribution to an Educational Savings Account is $2,000 which is phased out for high-income individuals.The contributions to a Section 529 Plan may be larger than $2,000 and are not phased out for high-income individuals.
• C)Distributions from Section 529 Plans are non-taxable if used for qualified education expenses.The Educational Savings Account distribution is taxable on the earnings portion of the distribution even if used for qualified education expenses.
• D)An Educational Savings Account income exclusion for distributions may be available in the same year as an education credit is claimed,but not if distributions from a Section 529 Plan are also taken.