Take advantage
of potential tax-exempt withdrawals used for education expenses.
Recommended
if:
You want
to help pay for a child's education and you want earnings to grow
tax-exempt
You can
make contributions to a CESA up to $2,000 each year per student
You have
a modified adjusted gross income less than $220,000 for married
taxpayers filing jointly and less than $110,000 for single taxpayers
You, your
employer, a non-profit corporation and even the student can make
contributions to a designated student's CESA.
Contributions
to a CESA
Nondeductible
contributions may be made to each child's account annually.
Contribution
deadline is the same as the contributor's tax filing deadline,
not including extensions.
The designated
student must be 18 years of age or younger (or older than 18 if
the student is a special needs beneficiary).
Withdrawals
and penalties
CESA withdrawals
used to pay for qualified education expenses are generally tax-free
and not subject to a 10% federal additional tax for early withdrawal.
Bank penalties may apply for withdrawals from time deposits before
maturity.
Funds in
a CESA must be distributed to the designated student by the time
the student reaches age 30, or funds rolled over to another eligible
family member's CESA.
| Member
CBAI | Member
AzBA | Member
ICBA
Retirement/Education Plans Personal
