| Withdrawals for
Qualified Higher Education Expenses are exempt from both NC and
federal income taxes. If your Beneficiary receives a
scholarship or attends a U.S. military academy, Withdrawals for
an amount not more than the scholarship or for an amount not
more than the cost of advanced education at a U.S. military
academy are without penalty; however, the earnings portion of
these types of Withdrawals are subject to federal and may be
subject to state income taxes. If a Withdrawal is requested
from the Protected Stock Fund due to the Beneficiary's death,
disability or receipt of scholarship there is a 5% surrender
charge.
See the Program
Description for more detail on types of Withdrawals and tax
implications.
If you are not a resident of NC, you may also wish to
consult an advisor in your state for your state's exemptions.
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