16 states might tax federally approved education plans

(The Center Square) – Families in 16 states could face state taxes and penalties for using what's called a "529 education savings plan" to pay for expenses approved under federal law, according to a report from the American Legislative Exchange Council. 

Congress established the 529 education savings plan in 1996 through the Small Business Job Protection Act. The 529 plan allows a family to save for qualified education expenses, including certain costs associated with K-12 education and higher education, according to Fidelity. The families save money through tax-deferred investments.