Educational IRA (EIRA)
Contributions are not excludable from AGI
Earnings accumulate tax-free
Distributions are not taxable as tax has been paid
Maximum contribution of $500 per year until beneficiary reaches age 18
Interest and tax-free withdrawal must be used or transferred by beneficiary’s 30th birthday
Cannot take advantage Hope/Lifetime tax credits in same year as distribution of EIRA funds
Recommendation: use Hope in first 2 years of college and liquidate EIRA in last two years