Which statement about 529 plans is true?

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Prepare yourself for the GFL Financial Literacy Test. Study with flashcards and multiple choice questions. Each question comes with helpful hints and thorough explanations to aid retention. Get ready for your exam and achieve success!

Multiple Choice

Which statement about 529 plans is true?

Explanation:
529 plans are tax-advantaged savings accounts designed to pay for education. Money grows with tax deferral, and withdrawals used for qualified higher-education expenses are tax-free at the federal level (often with state tax benefits too). The Utah Educational Savings Plan is a 529 plan offered as a nonprofit, state-supported option to help families save for college. This makes the statement true. The other choices don’t fit because 529 plans aren’t limited to Utah residents, they do offer tax benefits, and qualified expenses include more than room and board (tuition, fees, books, supplies, computers, and related costs).

529 plans are tax-advantaged savings accounts designed to pay for education. Money grows with tax deferral, and withdrawals used for qualified higher-education expenses are tax-free at the federal level (often with state tax benefits too). The Utah Educational Savings Plan is a 529 plan offered as a nonprofit, state-supported option to help families save for college. This makes the statement true. The other choices don’t fit because 529 plans aren’t limited to Utah residents, they do offer tax benefits, and qualified expenses include more than room and board (tuition, fees, books, supplies, computers, and related costs).

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