[20190620]IF11254_529个平面图和封面图的主要特点.pdf

https:/crsreports.congress.gov Updated June 20, 2019Major Features of 529 Plans and CoverdellsThere are two types of tax-advantaged education savings accounts. The first are qualified tuition programs (QTPs), commonly called 529 plans (referring to the section of the tax code that dictates their tax treatment). The second are Coverdell education savings accounts (ESAs), often referred to simply as Coverdells. This In Focus compares the major features of these two types of accounts; see Table 1. 529 Plans With 529 plans, distributions (i.e., withdrawals) are tax-free (including any investment earnings) if they are used to pay for qualified higher education expenses. In addition, up to $10,000 may be withdrawn tax-free per beneficiary per year and used for qualifying elementary and secondary school tuition expenses. If some or all of the distribution is used to pay for nonqualified expenses, then the earnings portion of the distribution is taxable, and may be subject to a 10% tax penalty. Most 529 plans are 529 savings plans, in which a contributor invests in a portfolio of mutual funds or other underlying investments. The savings and accumulated investment earnings can be used to p