Taxes

Q: Are there any tax benefits?

A: Earnings on qualified withdrawals are exempt from federal income tax and from State of Florida taxes.  There are gift tax benefits, too.

Q: Is a contract purchased through the program subject to gift tax?

A: To the extent that prepaid contracts exceed Federal limits on gifts, the contracts are subject to gift tax, but are allocable over a five-year period. For specific information regarding the gift tax consequences, please consult a professional tax consultant or certified public accountant.

Q: Is a lump-sum payment tax deductible?

A: No. Payments to the Florida Prepaid College Plan are not tax deductible.

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