The Education IRA is an account created by the Taxpayers Relief Act of 1997 that allows contributions to be made for the benefit of paying for the qualified higher education expenses for a child. Individuals can establish an Education IRA for the benefit of any child under the age 18.
All contributions are non-deductible.
Taxes and Penalties Distributions are excluded from gross income and are tax-free if used for qualified higher education expenses. The entire account must be distributed in the year the beneficiary reaches age 30. If not used for education by the original beneficiary before age 30, the account can be transferred tax-free to an Education IRA benefiting another family member. Education Calculator How much you need depends on many factors, including whether your children will attend a public college or a private one.