Whitehouse & Company CPA's
Can I move funds from my Coverdell education savings account to a 529 plan?


Generally, yes. You may withdraw funds from your Coverdell education savings account and not pay federal income taxes on the withdrawal if you use the funds for qualified education expenses. The rules for Coverdell ESAs consider a rollover contribution to a 529 plan (for the same person who is the beneficiary of the Coverdell ESA) as a qualified education expense. So, the transfer will usually be a nontaxable transfer from the Coverdell ESA to the 529 plan. Such a transfer may produce state income tax advantages.

Prepared by Broadridge Investor Communication Solutions, Inc, Copyright 2011