|
|
529
Plan |
UGMA/UTMA |
Education
IRA |
|
Maximum Contribution
|
$265,000
|
Unlimited
|
$2,000 per year until child turns 18
|
|
Limits on Income
|
None
|
None
|
Adjusted Gross Income limits apply
|
|
Age Limitations
|
None
|
Contributions must cease when child reaches
age of majority
|
No contributions after age 18, all distributions
must be made by age 30
|
|
Annual Maximum contribution per donor
|
$50,000 per beneficiary in the first year
of a five-year period to avoid federal gift tax consequences
($100,000 per married couple)
|
$10,000 per beneficiary per year to avoid
federal gift tax consequences
|
$2,000 per account per year |
|
Account earnings
|
No tax on earnings while they remain in the
account
|
Taxable
|
No tax on earnings while they remain in account
|
|
State tax deductible contributions
|
Varies by state of residence of account owner
|
No
|
No
|
|
Qualified use of proceeds
|
Any accredited post-secondary program in the
U.S. and some overseas
|
Limited to expenses for child only - can not
be used for parents expenses
|
Any accredited program I the U.S. and some
overseas
|
|
Account Management
|
Managed by holding firm
|
Managed by custodian
|
Managed by custodian
|
|
Fund's removed from donor's estate
|
Yes
|
No
|
Yes
|
|
Donor may change beneficiary at any time
|
Yes
|
No
|
Yes
|
|
Control of withdrawals
|
Account owner only
|
Transfers to child at age of majority
|
May be transferred to child at age of majority
|
|
Penalties for non-qualified withdrawals
|
10% penalty on earnings only
|
No
|
10% penalty on earnings only
|
| Taxation of qualified
withdrawals |
Earnings are taxed at beneficiary's rate
|
Sale of account assets may trigger capital
gains or other taxes on custodian or child.
|
Tax free
|
