Who can contribute?

Coverdell (Education) IRA's are set up by a Grantor. The grantor can contribute into the IRA until the designated beneficiary has turned 18.

The phase out range for Deposits for single filers is $95,000 - $110,000, for joint filers it increases to the MAGI of $190,000 to $220,000.

Education IRA’s can be used is conjunction with HOPE credit, Lifetime Learning credit, or Section 529 plans

Special needs beneficiaries, to be defined by the Treasury, can make contributions after the age of 18 and will not be required to receive a distribution of their account balances by age 30

Contributions not allowed:

Once the designated beneficiary of the Education Ira reaches 18

In any year that a contribution is made to state tuition program for the same IRA beneficiary

How Much can I contribute?

$2000 total for each year for all accounts opened on each child’s behalf

Contribution deadline is April 15 of the following tax year

Tax benefits

Withdrawals including earning are tax and penalty free for qualified higher education expenses (including elementary and secondary education)

Funds can be transferred from one child’s account to another child in that family

Qualified Expenses

All existing expenses for higher education plus expenses for primary and secondary education (K-12), including home computers to be used by the beneficiary and his or herfamily during that period.

RATES