| The New Look of ERAs | |
| Coverdell ESA (formerly Education IRA) | |
| Qualifications | The designated beneficiary must be an individual under the age of 18. The age 18 limitation does not apply to any designated beneficiary with special needs. |
| Maximum Contributions | $2,000 per beneficiary per year. |
| Tax Status of Earnings | Not taxed if qualified distribution. |
| Contribution Restrictions | Not
taxed. Yes, contributions phase-out between $95,000-$110,000 for singles and $190,000-$220,000 for married couples. |
| Tax Deduction | No. |
| Penalties for Early Withdrawal | None
if: * For payment of qualified education expenses. |
| Required Distributions | Must be complete 30 days after beneficiary reaches age 30 or dies. |
| Contribution after age 70 1/2 |
See your tax accountant regarding these conributions. * Contributions to a CESA and a qualified State Tuition program may now be made for the same tax year. |
| *
Not intended to be legal or tax advice. Consult your tax advisor for your
specific circumstances. ** Penalties apply for overfunding. |
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