In tax-qualified plans, premiums are tax deductible and earnings accumulate tax-free throughout the years. You must pay regular income taxes on all withdrawals at the time of the withdrawals.

In non-qualified plans, premiums are not deductible but earnings accumulate tax-free throughout the years. You must pay regular income taxes on earnings withdrawals only at the time of the withdrawals.

The Fidelity Arizona College Savings Plan is a tax-advantaged 529 plan open to U.S. residents. The Arizona Commission for Postsecondary Education is the plan's sponsor.

Earnings

Any earnings that grow federal income tax deferred

 

Contributions

Arizona residents and taxpayers are eligible for an increased state tax deduction on 529 contributions. The annual tax deduction shall not exceed $2,000 for single individuals and $4,000 for married couples filing jointly.

 

Withdrawals

Qualified withdrawals (withdrawals for education expenses) are free from federal and Arizona state income taxes.

Minimum Initial Investment

$50, or $15/month ($45/quarter) with automatic investments

 

Account Maximum

$412,000 per beneficiary

Desired amounts can be purchased by both the premium payer and the beneficiary, thus insuring that if either of them passes away, the full benefit is paid-in-full and tax-free. The insurance plan can also have a disability clause which pays the premium in the event the premium payer is disabled. The cash build-up in the plan accumulates tax-free and regular income tax is paid on the earnings only of the plan at the time of withdrawals. There are no maximum amounts that can be paid into the life insurance plan.