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Educational IRA

Who can contribute?

  • Anyone who has MAGI:
    • Up to $95k for single filers
    • Up to $190k for joint filers
  • Some people with higher MAGI may be able to make smaller contributions
  • Contributions not allowed after the beneficiary reaches age 18 (except for special needs beneficiaries)

How much can I contribute?

  • $2k per child each year
  • Limit applies to all Coverdell Education Savings Accounts (ESA's) for the same child

Who can make deductible contributions?

  • No one can deduct contributions.

What are the tax advantages?

  • Withdrawals for certain qualified education expenses are tax-free
  • Qualified education expenses include tuition, fees, books, computer equipment and technology required for elementary, secondary and post-secondary education

When can I withdraw without restrictions?

  • Withdrawals are tax-free and penalty-free only for qualified education expenses (earnings are subject to tax and penalty for most other withdrawals)
  • Funds can be transferred from one child's account to an account for another child in the family
     
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