What happens if the beneficiary receives a scholarship, becomes disabled or dies?
In the cases named above the account owner may withdraw the assets in the account without incurring the 10% federal tax penalty applicable for non qualified withdrawals. Only the assets up to the amount of the scholarship can be withdrawn without penalty. In all cases the earnings will be subject to federal income tax, however.
The account owner can withdraw the assets if the beneficiary receives a scholarship, becomes disabled or dies. A withdrawal on account of the beneficiary’s death, disability or receipt of a scholarship (to the extent of the scholarship award) is subject to federal income tax but the 10% federal tax penalty is waived.
The account owner can withdraw the assets if the beneficiary receives a scholarship, becomes disabled or dies. A withdrawal on account of the beneficiary s death, disability or receipt of a scholarship (to the extent of the scholarship award) is subject to federal income tax but no federal tax penalty.
The Account Owner can withdraw the assets if the beneficiary receives a scholarship, becomes disabled or dies. A withdrawal on account of the beneficiary’s death, disability or receipt of a scholarship (to the extent of the scholarship award) is subject to federal income tax but no federal tax penalty.
