529 Plans

Coverdell Education Savings Account

UGMA/UTMA Account

Prepaid Tuition Programs

Contributions can be made by anyone and there are no limits.

Individuals with income of $95,000 and $110,000 and married couples with incomes between $190,000 and $220,000 are subject to a phase out.

None.

None.

Varies by plan.

$2,000 per year per beneficiary.

None.

Depends on plan and age of student.

Earnings build federally tax-free and withdrawals are not taxed if used for qualified higher education expenses.

Earnings build federally tax-free and withdrawals are not taxed if used for qualified elementary, secondary and higher education expenses.

For children under 14, the first $750 of earnings is tax-free.

Earnings between $750 and $1,500 are taxed at the child’s rate; earnings above $1,500 are taxed at the parents’ rate. All earnings for children 14 and older are taxed at the child’s rate.

Tax-Free if used for qualified expenses

Control of assets, timing of withdrawals, and beneficiary changes are all handled by owner

Upon reaching age of majority, beneficiary may assume control

Control goes to beneficiary at age of majority.

In most states, control of account will always remain with contributor.

Varies by plan.

You can move assets as often as you desire.

There are no restrictions on moving assets, but each transfer is taxable.

Plan administrators invest all assets.

Tuition, books, and room and board for higher educations.

Educational expenses such as tuition, books and room and board for kindergarten through graduate school.

Any use that benefits the child.

Tuition at a college within the plan (some plans also cover room and board).

Yes.

Yes.

No.

Yes.

Ordinary income taxes and a 10% IRS penalty on earnings.

Ordinary income taxes and a 10% IRS penalty on earnings.

Not applicable.

Ordinary income taxes and a 10% IRS penalty on earnings..

Varies by plan/state.

No.

No.

Varies by plan/state.