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What if the beneficiary does not use the account for higher education expenses?

April 26, 2017account Beneficiary expenses higher education

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What if the beneficiary does not use the account for higher education expenses?

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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.