Glossary

1 5 A B C D E F G H I L M N P Q R S T U W Y
1 5 A B C D E F G H I L M N P Q R S T U W Y

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  • Tax Advantages

    Tax advantages include federal tax-deferred earnings and tax-free distributions from a 529 plan, as well as any state income tax deduction or tax credit for contributions to the state’s 529 plan.

  • Tax Credit

    A tax credit is a direct reduction in a tax liability. Some states have 529 tax credits.

  • Tax Deduction

    A tax deduction is a reduction in taxable income. Some states have 529 tax deductions. (In New Mexico, 100% of contributions to your 529 account with The Education Plan are deductible from your New Mexico state taxable income each year.)

  • Tax Deferred

    When taxes are deferred, they are paid at a future date instead of when the income or gain was originally earned. This can shift the taxes to a time when the taxpayer has a lower tax bracket or a situation when the tax liability is disregarded, such as a qualified distribution from a 529 plan.

  • Tax Penalty

    A tax penalty is additional federal tax that serves as a disincentive for certain activities, such as non-qualified distributions from a 529 plan. 

    See also: Non-Qualified Distribution.

  • Total Return

    The total return on an investment is the percentage change in the investment’s net asset value, assuming that all dividends and capital gains distributions are reinvested.

  • Trust Fund

    A trust fund is a set of assets that are held by a trustee for the benefit of one or more beneficiaries.

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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC.

The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

All other marks are the exclusive property of their respective owners.

Not FDIC-Insured. No Bank, State or Federal Guarantee. May Lose Value.