Final answer:
A 529 plan is a type of education savings account that may have tax consequences and penalties if funds are withdrawn for purposes other than qualified education expenses.
Step-by-step explanation:
A 529 plan is a type of education savings account that allows individuals to save money for qualified education expenses, such as tuition, fees, and room and board.
However, if the funds from a 529 plan are withdrawn for purposes other than qualified education expenses, there may be tax consequences and penalties.
These penalties vary depending on the state and the specific circumstances, but generally involve paying taxes on the earnings portion of the withdrawal and potentially a 10% penalty.