Common use of Withdrawals upon Completion of Education Clause in Contracts

Withdrawals upon Completion of Education. Upon completion of the Designated Beneficiary’s education, any amount remaining in a Xxxxxxxxx ESA may be withdrawn for the Designated Beneficiary, and the Designated Beneficiary will be subject to income tax for that withdrawal. The Designated Beneficiary will also be subject to a 10% tax penalty on the amount of the withdrawal that represents earnings, unless the Designated Beneficiary has Qualified Education Expenses in the same taxable year. • Alternatively, any balance remaining in a Designated Beneficiary's Xxxxxxxxx ESA may be withdrawn and transferred to another Xxxxxxxxx ESA for the benefit of a Family Member, and the transferred amount will not be taxable.