Coverdell Education Savings Account (Education IRA)
The Coverdell Education Savings Account, formerly the Education IRA, provides for
individuals to save for a child's higher education on a tax-favored basis.
The Coverdell Account is a back-ended savings account similar to the Roth IRA in that no
deduction is allowed for the contribution.
The main tax benefits of the Coverdell Education Savings Account are the
tax-deferred growth of the earnings and the ability to take tax-free
withdrawals for higher education expenses.
Qualified education expenses now include
Elementary, Secondary and Post Secondary, Public, Private and Religious Schools.
Also included: tuition, fees, academic tutors, special needs services, books, supplies,
room and board, uniforms, transportation, computer equipment, educational software, and
internet access
| Contributions |
| Minimum Age of Child Beneficiary |
None |
| Maximum Age of Child Beneficiary |
18 years |
Income Maximum of Contributor:
(nondeductible contributions only)
Filing Single
Married, Filing Joint
|
As follows:
$95,000 - $110,000 (MAGI)
$190,000 - $220,000 (MAGI)
|
| Distributions |
| Qualified Education Expenses |
Tax and Penalty Free |
| Distributions for non-Qualified Education expenses |
Earnings are taxable income and subject to an additional 10% penalty |
| Age 30 (+30-day flex period) - Full Distribution Required |
Earnings are taxable income and subject to an additional 10% penalty |
|
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