An Educational IRA account was created as an incentive to help parents and students to help save for higher education costs.
Here are the basic guidelines:
- Total contributions for the beneficiary cannot exceed $2,000 in any year no matter how many accounts have been established
- A beneficiary is under the age of 18 or is a special needs beneficiary
- Contributions are not tax deductible, but the amounts deposited grow tax-free until distributed
- Distributions are are tax-free provided they are used for qualified education expenses (tuition and fees, required books, and room and board)
- Insured by the NCUA
*Please contact your tax advisor as restrictions may apply.
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