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Mississippi State Treasurer Lynn Fitch Mississippi State Treasurer Lynn Fitch

 MACS FAQs

Can MACS be used to pay for elementary and secondary tuition expenses?

The Tax Cuts and Jobs Act, passed by Congress in December 2017, expanded the definition of a qualified higher education expense under Section 529 of the Internal Revenue Code. Expenses for tuition in connection with enrollment or attendance at elementary or secondary public, private, or religious school, is now included as a qualified higher education expense.

It is important to note that the law also caps distributions for this purpose at $10,000 per student per tax year. Therefore, although an individual may be the designated beneficiary of multiple accounts, that individual may receive a maximum of $10,000 in distributions free of tax, regardless of whether the funds are distributed from multiple accounts, in any given tax year.

These provisions apply to any distributions made after December 31, 2017.

The above provisions only apply to MACS, not MPACT.

As always, we advise you consult your tax professional for questions and guidance.

What are the federal and state tax advantages?

When you contribute to the Mississippi Affordable College Savings (MACS) Program, any account earnings are federal and Mississippi income tax-deferred. Plus, distributions used to pay for qualified higher education expenses will be free from federal and Mississippi income tax. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.

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Is there a Mississippi income tax deduction?

Yes, you may be eligible for a Mississippi income tax deduction. The amount contributed by a Mississippi taxpayer to MACS Program accounts during a tax year is deductible from Mississippi adjusted gross income in an amount not to exceed $10,000 for a single return or $20,000 for a joint return for that tax year.

The earnings portion of a non-qualified withdrawal will be taxable to a resident recipient of the withdrawal. The contribution portion of a non-qualified withdrawal that was previously deducted for Mississippi income tax purposes will be included in the resident recipient’s Mississippi gross income.

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Who can open an account?

Any individual of the legal age of majority in his or her state of residence with a Social Security number or federal Taxpayer Identification Number who is a U.S. citizen or resident alien can open an account and contribute to the MACS Program account on behalf of any beneficiary. An organization described in Section 501(c)(3) of the Internal Revenue Code, an estate or a trust may also open an account. Such entities will be subject to additional restrictions or administrative requirements and may not open an account online or participate in e-Delivery. You can even open an account for yourself.

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What are my investment options?

The Plan offers you a choice of ten Investment Options. These options vary in their investment strategy and degree of risk, allowing you to select an option or combination of options that may fit your needs. To see the list of Investment Options, brief descriptions and associated fees and expenses, visit Investment Options. For more information on the risks involved in investing in such Investment Options, and the type of investor for whom each investment option may be appropriate, and investment option performance, read the Disclosure Booklet.

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Can I make a payment online?

You may make contributions online by logging into your account here. If you have not logged on to your account before you may create your online access here.

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Do I have to use my account at a Mississippi college or university?

No. The money in your account may be used at any eligible educational institution. This includes public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain proprietary and vocational schools.

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Can I transfer assets in a Coverdell Education Savings Account to the MACS program?

Yes, but you should discuss this with your financial advisor to determine if there are any tax or other consequences. To do a transfer, use the Rollover Form and complete an Account Application.

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Can I roll over funds from another 529 plan into the MACS program?

You are permitted to transfer funds from another 529 college savings plan to an account in the MACS Program for the same beneficiary twice within a 12-month period without incurring federal income tax. The 529 college savings plan from which you are transferring funds may be subject to differences in features, costs and surrender charges. You should consult your tax advisor or the other 529 college savings plan. State and local taxes may apply. To complete a rollover, use the Rollover Form.

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Can assets from an UGMA/UTMA account be transferred to the MACS program?

Yes, though transferring UGMA/UTMA assets into a 529 plan account may result in a tax liability. You should discuss this with your financial advisor. UGMA/UTMA accounts cannot be opened online. To open a MACS Program UGMA/UTMA account, use the Custodial Account Application.

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What fees and expenses do I pay with MACS?

You can see all annual asset-based fees associated with your MACS account in the Disclosure Booklet.

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What should I consider before requesting a withdrawal from my MACS account?

  • Please refer to the MACS Disclosure Booklet for detailed information on withdrawals, including possible federal and state tax implications where applicable.
  • For check withdrawals to a School, please ensure you have 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, funds will be issued to the account owner’s bank account on record.​

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How long does it take for a distribution to be made from my MACS account after I make a request?

  • ​Please refer to the MACS Disclosure Booklet for detailed information on withdrawals, including possible federal and state tax implications where applicable.
  • Please note the following hold periods may apply to your withdrawal ​​​
    • ​​​​​​​Withdrawals, including funds from a recent contribution, will be processed on the applicable trade date, but funds may not be sent for ten (10) calendar days to allow sufficient time for the contribution to clear.
    • Changes to a mailing address, or directing a withdrawal to a new bank or other financial account requires fifteen (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 fifteen (15) calendar days before a withdrawal can be requested.

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