If the taxpayer withdraws the money for any reason other than to pay qualified higher education expenses for the account's designated beneficiary, he must pay state income tax on the part of the withdrawal that represents deductible contributions. These maximum deductions apply for the 2000 tax year. Contributions that exceed the maximum deduction may be carried forward and deducted in future years until the entire contribution is deducted. Taxpayers must pay income taxes on any funds not used for qualified higher education expenses unless the reason the money was not used is that the student died, became disabled, or received a scholarship. Contributions to another state's college savings plan are not deductible.
Annual payments are state income tax-deductible.
There are no limits.