MET means peace of mind. Parents and others can pay for future education at today's prices and provide an opportunity for young children and/or high school graduates by encouraging them to excel beyond high school.
Because everyone's life is full of changes; transferability is an important feature of MET. After the Beneficiary of a MET turns 18 years old, all or a portion of the credits may be transferred to an immediate family member (as defined in the contract) without any tax implications. Typically, immediate family member is defined as the spouse, mother, father, brother, sister, legally adopted brother or sister, child, legally adopted child, niece, nephew or cousin of the first degree of the Beneficiary. The new Beneficiary does not have to be a Michigan resident to have credits transferred to them. Refer to the "Contract Definitions" section of your contract.
The original Beneficiary of a MET has 15 years from their expected high school graduation date on the contract to use, terminate for a refund, or transfer their benefits.
To transfer a MET the original Beneficiary needs to complete Form 2781 Notice to Transfer a MET Educational Benefits Contract and submit a $25 transfer fee.
Contracts that have been terminated for a refund, use at a Michigan private, or out-of-state institution are not eligible for transfer.
A contract cannot be transferred to a beneficiary who already has 5 years (10 semesters) of MET educational benefits.
MET accepts rollovers from other 529 programs (including MESP) and from the redemption of a Coverdell Education Savings Account or a Qualified U.S. Savings Bond. However, MET contracts cannot be rolled over to other 529 programs until the Beneficiary is age 18 or graduated from high school.
MET goes where you go. Students can direct MET funds to Michigan private colleges, out-of-state schools or even trade schools. Refund options are also available for full scholarship, military enlistment, death or disability, or not attending college.
MET funds may not provide full-tuition at non-Michigan public colleges and universities, but it does provide weighted average, average or lowest tuition of Michigan public colleges. See the Termination Refund Provisions chart in the MET Contract.
This tax discussion is included for general information only. Consult a tax advisor for advice on how the Purchaser/Beneficiary might be specifically affected as a result of program participation.
A Purchaser may deduct the total contributions made during a given tax year from taxable income when determining Michigan income tax for the year.
Please Note: Deductions are taken on Michigan tax form Schedule 1, line 18.
MET is a qualified tuition program under Section 529 of the Internal Revenue Code. MET benefits used to pay college tuition and mandatory fees may be exempt from federal and Michigan income taxes. If, however, a MET contract is terminated and the refund is not used to pay qualified higher education expenses, contract "earnings" (the value of the refund over the amount paid for the corresponding portion of the contract) could be subject to federal and Michigan income taxes and a 10% federal excise tax. The person receiving the refund will be responsible for those taxes.
