529 Plans or Qualified Tuition Programs – 

• are established and maintained by states and allow either payment or contribution to an account to pay for qualified education expenses at a post secondary institution;
• payments and contributions are not deductible on federal tax returns;
• distributions and withdrawals are not taxed so long as the amount withdrawn is not more than the beneficiary’s adjusted qualified education expenses;
  • qualified expenses include amounts required to be paid for education such as tuition, fees, books, supplies and equipment such as computer or peripheral equipment, computer software and internet access and related services used primarily by the student while enrolled at an eligible institution.

Individuals can find additional information about qualified tuition programs offered in their state by visiting the website of the state you reside in and/or that a student plans to attend post-secondary education.

Coverdell Education Savings Account

• a maximum of $2,000 a year can be contributed to this type of account then used to pay either qualified higher education expenses or qualified elementary and secondary education expenses of the beneficiary;
• contributions are not deductible; and
• distributions are not taxed unless they exceed the beneficiary’s qualified education expenses at a public, private, or religious school that provides elementary or secondary education as determined by state law.
• Qualified education expenses include tuition, fees, required books, supplies, equipment and room and board.