MACS | Frequently Asked Questions
Frequently Asked Questions
Can MACS be used to pay for elementary and secondary tuition expenses? Yes, but they are capped. Expenses for tuition in connection with enrollment or attendance at elementary or secondary public, private, or religious school are now included, but distributions for this purpose are capped at $10,000 per student per tax year. These provisions apply to any distributions made after December 31, 2017, and apply to MACS (not MPACT). Consult your tax professional for guidance.
What are the federal and state tax advantages? Any MACS account earnings are income tax-deferred on your federal and Mississippi taxes. Distributions used to pay for qualified higher education expenses will also be free from federal and Mississippi income tax. Non-qualified withdrawals may be subject to federal and state taxes and a 10% federal tax.
Is there a Mississippi income tax deduction? Yes! What you contribute (up to $10,000 for a single return or $20,000 for a joint return) during a tax year is deductible from Mississippi adjusted gross income.
If you make a non-qualified withdrawal, however, the earnings portion will be taxable to a resident recipient, and the contribution portion that was previously deducted will be included in the resident recipient’s Mississippi gross income.
Who can open an account? Anyone of legal age with a Social Security Number of Federal Taxpayer Identification Number who is a U.S. citizen or resident alien can open an account. A 501(c)(3), an estate, or a trust can as well, but they will be subject to additional restrictions or administrative requirements.
What are my investment options? You have your choice of 10 options, each varying in strategy and risk. For more information, please refer to our Disclosure Booklet.
Can I make a payment online? Of course! Visit access.ms529.com to log in or create an account.
Do I have to use my account at a Mississippi College or university? No. The money in your account can be used at any eligible institution, including public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain proprietary and vocational schools.
What fees and expenses do I pay with MACS? You can see all the annual asset-based fees associated with your account in the Disclosure Booklet.
Can I transfer assets from another fund into the MACS program? Yes, but certain plans operate differently:
- A Coverdell Education Savings Account to the MACS program. Please discuss the transfer with your financial advisor to determine if there will be any tax consequences. If you would like to move forward with the transfer, use the Rollover Form and complete and Account Application.
- Another 529 plan to the MACS program. You are permitted to transfer funds from another 529 college savings plan to the MACS program twice within a 12-month period without incurring federal income tax. You may be subject to differences in features, costs, and surrender charges. Again, please consult with your tax advisor before making the transfer, as state and local taxes may also apply. If you would like to move forward, use the Rollover Form.
- UGMA/UTMA account to the MACS program. This may result in a tax liability, so please discuss with your financial advisor. To open a MACS Program UGMA/UTMA account, use the Custodial Account Application.
What should I consider before requesting a withdrawal from my MACS account? For the most detailed information, please refer to the Disclosure Booklet, but here are a few of the basics:
- For check withdrawals to a school, include the Beneficiary’s Student ID and the school’s correct mailing address for payments.
- For check withdrawals to the Account Owner or Beneficiary, funds will be issued to the mailing address on record.
- For withdrawals by ACH (i.e., an electronic money transfer), funds will be issued to the account owner’s bank account on record.
How long does it take for a distribution to be made from my MACS account after I make a request? For the most detailed information, please refer to the Disclosure Booklet, but here are a few of the basics:
- Withdrawals, including funds from a recent contribution, will be processed on the applicable trade date, but funds may not be sent for 10 calendar days to allow sufficient time for the contribution to clear.
- Changes to the mailing address or directing a withdrawal to a new bank or other financial account requires 15 calendar days before any withdrawals are sent.
- If the account has been transferred to a new Account Owner, the new Account Owner must be in effect for at least 15 calendar days before a withdrawal can be requested.