Contributions

• Does Not Require Earned Income
• Whether or not a contribution is made to a qualified state union program for the child.
• The maximum contribution is $2,000 per child.
• Modified Adjusted Gross Income of the contributor can not exceed certain limits.
• Contributions for each year can be made until December 31st of that year.
• Not aggregated with other IRAs.
• Limit applies to all Education IRAs for the same child.

Withdrawals

• In order to be tax-free, distributions must be used for the beneficiary's qualified higher education expenses incurred at an eligible higher education institution.

Qualified Higher Education Expenses are:

• Tuition, fees, books, supplies, and equipment required for the enrollment or attendance of the designated beneficiary at an eligible higher education institution.
• Room and board are also eligible expenses if the student is enrolled at least half-time.

Higher education expenses must be reduced by:

• A qualified scholarship which is excludable from gross income.
• An educational assistance allowance.

Individuals can also withdraw from their Traditional IRA and/or Roth IRA to pay for qualified education expenses. However, the total of all IRA distributions cannot exceed the actual expense.

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