You may be able to establish an education individual retirement
account (education IRA or Ed IRA) to finance a child's qualified
higher education expenses.
You may be able to contribute up to $500 cash each year to an
education IRA for a child under age 18. Contributions to an education
IRA are not deductible, but amounts deposited in the account grow tax
free until withdrawn.
Any individual (including the child) can contribute to a child's
education IRA if his or her income is below a certain amount. There is
no limit on the number of education IRAs that can be established
designating a child as the beneficiary. However, total contributions
for the child during any year cannot be more than $500. See
If, for a year, withdrawals from an account are not more than a
child's qualified higher education expenses at an eligible educational
institution, the child will not owe tax on the withdrawals. See
What Is an Education IRA?
Rollovers and Other Transfers