I’ve had this one come up a few times on my practice exam and I think none of the answers are false. In the explanation it mentions that contributions are not fed tax deductible but in the question the option says possibly state tax deductible.
Great eye, @Jen!
There’s a mistake in the answer. It should say “529 plan contributions may be deductible against federal taxes.” We’re fixing this right now. Thanks for pointing it out!