Education IRA
The new Education IRA serves to help parents and others save for children’s education. Contributions are not tax deductible, but the earnings grow tax deferred. Distributions used to pay for qualified education expenses are tax-free.
Who can contribute?
Contributions to benefit a child under age 18 may be made by:
Couples who file a joint tax return and have joint MAGI* of $150,000 or less.
Persons filing an individual tax return with MAGI* of $95,000 or less.
Reduced contributions for incomes over these amounts.
Contributions not allowed in any year that a contribution is made to a state tuition program for the child.
How much can I contribute?
No more than $500 total each year for all accounts opened on the child’s behalf.
Who can made deductible contributions?
No one can deduct contributions.
What are the tax advantages?
Withdrawals for qualified higher-education expenses are tax-free.
Can I withdraw from the account?
