Education Savings

Two Programs Available

Coverdell Education Savings Account
Income Limits Contribution is phased out if income is $95,000 – $110,000 if single, or $190,000 – $220,000 if married
Contribution Limits $2000 per year per beneficiary
Control Beneficiary may assume control at age 18 or 21 in most states
Uses Education expenses for kindergarten through high school, college and graduate school. Expenses include tuition, books, and lodging.
Change Beneficiary Yes
Withdrawal Penalties 10% IRS Penalty on earnings
Earnings 1/2 % over declared dividend
Insurance NCUSIF insured
Tax Treatment Tax exempt. In case of withdrawals for non-educational purpose, all earnings will be taxed in the year it is withdrawn.
Nizari Credit Union College Savings Account
Income Limits No income limits for contribution
Contribution Limits $6000 per year per beneficiary
Control Account is controlled by custodian
Uses Education expenses for college and graduate school. Expenses include tuition, books, and lodging.
Change Beneficiary Yes
Withdrawal Penalties 10% Penalty on earnings
Earnings 1/2 % over declared dividend
Insurance NCUSIF insured
Tax Treatment Earnings subject to tax every year. Custodian will receive 1099-INT each year.

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