Q. How are my contributions invested?
A. MACS offers you three investment choices: a core Managed Allocation Option, a Money Market Option and a 100% Equity Option. These choices vary in their investment strategy and degree of risk, allowing you to select an option or options that best fit your needs and investment philosophy. For a description of these investment options, and to help you and your family make the right choice, please refer to the Investment Options section of this web site.

Q. How much is the Mississippi state tax deduction?
A. Contributions to a MACS Program Account of up to $10,000 a year per account owner ($20,000 for married couples jointly filing the Mississippi income tax return) may be deducted from Mississippi state income tax. Contributions must be made by April 15th of the following calendar year to qualify for the deduction. If a nonqualified withdrawal is taken from the MACS Account, the portion of the withdrawal attributable to contributions that were previously deducted for Mississippi income tax purposes will be included in computing the Account Owner's Mississippi taxable income for the year in which the nonqualified withdrawal is paid.

Q. What about Gift and Estate Taxes?
A. Contributions of up to $12,000 per year to an Account for a beneficiary (possibly $24,000 for married couples) are free of federal gift tax provided the contributor makes no other gifts during the year to the same beneficiary. You may contribute up to $60,000 in single year (or up to $120,000 for married couples) per beneficiary and elect to treat this contribution as five years' worth of tax-free gifts. No federal gift tax will apply provided the contributor makes no other gifts to the same beneficiary during the five-year proration period. In addition, even though the Account owner maintains control over the Account, amounts in an Account generally are not included in the Account owner's gross estate for federal estate tax purposes.

Q. If I open an Account, will my child still be eligible for financial aid?
A. Your eligibility will depend on your family's financial circumstances at the time you apply for financial aid. The U.S. Department of Education and others have advised that funds in qualified state tuition programs, like the MACS Program, may be considered an asset of the Account owner.

Q. How is the money taxed when it is withdrawn for qualified higher education expenses?
A. Withdrawals used for qualified higher education expenses will be free of both federal and Mississippi income tax.

Q. Can a Hope Scholarship Credit or Lifetime Learning Credit for qualified tuition and other related expenses still be taken?
A. The student or the student's parent may claim a Hope Scholarship Credit or Lifetime Learning Credit for certain qualified tuition and related expenses that are paid with a withdrawal from your Account, provided the eligibility requirements for the credit are met. However, the same expenses cannot count toward tax-free treatment from MACS and the Hope or Lifetime Learning Credit.

Q. Can I contribute to an Education IRA if I participate in the MACS program?
A. Yes. Contributions to the Education IRA and MACS can be made for the same beneficiary in the same year. However, the same expenses cannot count toward tax-free treatment from MACS and from an Education IRA (now known as Coverdell Education Savings Account).