Our Education Savings account is a nondeductible account that features tax-free withdrawals for a very specific purpose -- a child's education expenses. Contributions are limited to $2,000 for higher education purposes and can only be made for the benefit of children under the age of 18.
Although traditional and Roth IRAs may permit distributions for higher education, the qualified distributions are only penalty-free. The same distributions from an Education Savings account are penalty-free and federal income tax-free. Consult your tax or legal professional for further information regarding state or local income taxes.