Please be advised you are now leaving the Northern Funds section and being directed to a site maintained by Northern Trust. Please click OK to continue.
Education Savings Account (ESA) at a glance:
How much can you contribute?
If you meet the income requirements (highlighted in the chart below), you may contribute up to $2,000 annually to an ESA for any child under age 18.
|Higher Income Limits May Make Education Savings Easier|
|If my tax-filing status is …||… and my modified adjusted gross income is …||… then I can contribute this much to an ESA:|
|Single||Less than $95,000||$2,000 per year per child|
|$95,000 to $110,000||Partial contribution permitted|
|More than $110,000||No contribution permitted|
|Married, filing jointly||Less than $190,000||$2,000 per year per child|
|$190,000 to $220,000||Partial contribution permitted|
|More than $220,000||No contribution permitted|
Are contributions deductible?
Contributions are not deductible and must be made with after-tax dollars. But, because taxes have already been paid on contributions, qualified withdrawals are tax-free.
What about withdrawals?
Earnings and distributions from an ESA are tax- and penalty-free, provided the funds are used for qualified elementary-, secondary- or higher-education expenses and the amount of the withdrawal does not exceed the child's education expenses for that year. Earnings withdrawn for any other purpose will be subject to income tax and may be subject to a 10% penalty tax.
If a child reaches age 30 without using all the money in his or her ESA, the balance may be rolled over into an account for another family member. Otherwise, the money will be automatically distributed to the child, and taxes and penalties may apply. Designated individuals with “special needs,” however, are not subject to required distributions at age 30.
IRS CIRCULAR 230 NOTICE: This information is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see northerntrust.com/circular230.
Not FDIC insured | May lose value | No bank guarantee
An investment in Northern Funds is not insured by the FDIC, and is not a deposit or obligation of, or guaranteed by The Northern Trust Company or any affiliate. An investment in Northern Funds involves risks, including possible loss of principal.
Please carefully read the prospectus and summary prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds before investing. Call 800-595-9111 to obtain a prospectus and summary prospectus, which contains this and other information about the funds.
Shares of the Northern Funds are offered only by a current Prospectus and are intended solely for persons to whom shares of US registered funds may be sold. This site shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the Northern Funds in any jurisdiction in which such offer, solicitation or sale would be unlawful.
©2014 Northern Funds | Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.