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College Gifting FAQ
The Account Owner has two options: (1) Change the Designated Beneficiary on the account to another eligible family member1 of the current beneficiary, or (2) Withdraw the account value. In that event, account earnings will be subject to ordinary income taxes.
Uniform Gifts to Minors Act/Uniform Transfers to Minors Act – Legislation that permits a gift of money or securities to be given to a minor and held in a custodial account that is managed by an adult for the minor’s benefit. By transferring income and capital gains to a minor’s name, they may be taxed at a lower rate.
You may be able to roll over the value of other education savings accounts, including Coverdell Education Savings Accounts (ESA), Qualified Tuition Programs (529 Plans), and certain US Savings Bonds. See the Offering Statement for more details.
1 Please see the Offering Statement for a definition of eligible beneficiaries and eligible family members.