(1) A taxpayer is allowed to deduct the lesser of the total contributions actually made to one or more Montana family education savings accounts during the tax year, or $3,000. A deduction is allowed only for contributions to accounts owned by the taxpayer, the taxpayer's spouse, or, if the taxpayer's child or stepchild is a Montana resident, the taxpayer's child or stepchild.

(2) For purposes of the $3,000 reduction to Montana adjusted gross income, contributions must be made to a Montana family education savings account. Contributions made to other state or private family education savings accounts do not qualify for the Montana reduction to income.

(3) For Montana tax purposes, deductible contributions to a family education savings account do not include the earnings on the account.