What happens if the beneficiary does not use the account for higher education expenses?
The Account Owner may select a new beneficiary who is a member of the family of the previous beneficiary without income tax or penalty. In the alternative, the account owner may withdraw the funds, but will have to pay federal income tax and a 10% federal tax penalty on the earnings. For DC taxpayers, that portion of non-qualified withdrawals that is attributable to previously deducted contributions and the account earnings shall be subject to District of Columbia income taxation in the year in which the withdrawal is made. Consult your tax advisor. Can two individuals be named as joint beneficiaries on a single account? No. Only one individual can be designated as the beneficiary of an account. In addition, there can only be one account owner for an account. Can several people open an account for the same beneficiary? Yes, more than one person is permitted to open an account for the same beneficiary. Only one person, however, may be listed as the owner on the account. Will savings in
