How do I make withdrawals? The funds are treated as a gift to the beneficiary, and therefore, may only be withdrawn by the beneficiary for qualified education expenses. Any funds not used by the beneficiary may be rolled over into another Educational IRA for another beneficiary. All funds must be withdrawn by the time the beneficiary turns 30 years old. Remaining funds not used by the beneficiary for qualified education expenses and not rolled over into another Educational IRA, will be distributed to the beneficiary and subject to normal income taxes and a 10% tax penalty. Additionally, you may claim a Hope or Lifetime Learning Credit in the same taxable year that you claim a tax-free distribution from an Educational IRA, just as long as the distribution does not cover the same expenses claimed for the Hope or Lifetime Learning Credit.
