Saving for College
If you’re looking for a way to set money aside to pay for higher education expenses, WSECU has options for Coverdell Education Savings Accounts (ESAs) and 529 Plans. These accounts can be established concurrently for the same beneficiary and contributions can be made to both. Highlights of each are listed below; complete details are available in IRS Publication 970 at www.irs.gov.
- Contributions are not tax-deductible.
- Contributions can be made until the beneficiary turns 18.
- Earnings can be tax-free.
- Qualified withdrawals are tax-free and penalty-free.
529 Plans (Qualified Tuition Program)
- Earnings and withdrawals are tax-free and penalty-free as long as they are used for qualified higher education expenses.
- Plans are offered through the state government or eligible educational institutions.
- Two plan types:Plans vary from state to state.
- Pre-paid Tuition Plan – Age limit to open depends on plan.
- College Savings Plan – No age limit to open
- You are not restricted to the plan offered through your state of residence
- Washington’s program is called GET (Guaranteed Education Tuition); click here or contact us for more information.
Please consult your tax adviser to determine your eligibility, then give us a call or stop by your local branch.