529 plans tax def?

Question

I was looking into starting a 529 plan for my child and was wondering how it all works. I heard it is tax deferred...is that just the earnings or is that the contributions too...

Answer 1

You use after tax dollars so there can be no deductions.  However all earnings are Tax fee if used for education.  If not you can take the contributions out at any time without taxes but you must pay the taxes on the earnings.

Answer 2

Just the earnings, you can't deduct the contributions.  Actually the earnings are tax free not just deferred.