Which statement about 529 plans is true?

Which statement about 529 plans is true?

• A. The Utah Educational Savings Plan is a nonprofit 529 college savings plan.
• B. 529 plans are available only to Utah residents.
• C. 529 plans do not offer any tax benefits.
• D. 529 plans are limited to use for room and board costs.

Answer: (A)

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).