Quick Answer
Across the four account types in this unit, control and tax timing diverge: the 529 owner and the HSA holder each retain control indefinitely, a Coverdell's responsible individual (custodian) manages the account rather than the owner, and a UTMA/UGMA minor owns the assets outright from the moment of transfer. Only the HSA is funded pre-tax; the other three are funded after-tax with different qualified-withdrawal deadlines and non-qualified penalty rules.
This section brings together the four account types covered in this unit for quick comparison and exam review.
How Do the Four Account Types Compare?
| Feature | 529 Plan | Coverdell Education Savings Account (ESA) | UTMA/UGMA | Health Savings Account (HSA) |
|---|---|---|---|---|
| Primary purpose | Education savings | Education savings | Any purpose for minor | Medical expenses |
| Tax on contributions | After-tax | After-tax | After-tax (gift) | Pre-tax / deductible |
| Tax on growth | Tax-deferred | Tax-deferred | Taxed (kiddie tax) | Tax-free |
| Tax on qualified withdrawals | Tax-free | Tax-free | N/A | Tax-free |
| Income limits | None | Yes | None | None (but need High-Deductible Health Plan) |
| Contribution limit | State aggregate | $2,000/year | No limit (gift tax applies) | $4,400-$8,750 (2026) |
| Contributions must end by | No age limit | Age 18 (beneficiary) | No age limit | No age limit (stops at Medicare enrollment) |
| Owner retains control | Yes | No (responsible individual/custodian manages) | No (minor owns assets) | Yes (individual) |
| Funds must be used by | No deadline | Age 30 | No restriction | No deadline |
| Non-qualified penalty | 10% on earnings | 10% on earnings | N/A | 20% before age 65 |
What Are the Key Numbers to Memorize (2026)?
| Account | Item | Amount |
|---|---|---|
| 529 | Annual gift tax exclusion | $19,000 |
| 529 | Superfunding (5-year front-load) | $95,000 |
| 529 | To Roth IRA rollover lifetime cap | $35,000 |
| 529 | K-12 expense annual limit | $20,000 |
| 529 | Student loan lifetime limit | $10,000 |
| Coverdell | Annual contribution per beneficiary | $2,000 |
| Coverdell | Phase-out, single | $95,000-$110,000 |
| Coverdell | Phase-out, married filing jointly | $190,000-$220,000 |
| Coverdell | Contributions must end | Before age 18 |
| Coverdell | Funds must be used by | Age 30 |
| UTMA/UGMA | Kiddie tax, parents' rate kicks in | Above $2,700 |
| UTMA/UGMA | FAFSA impact rate (student asset) | 20% |
| HSA | Self-only contribution | $4,400 |
| HSA | Family contribution | $8,750 |
| HSA | Catch-up (age 55+) | +$1,000 |
| HSA | Non-medical penalty (under 65) | 20% + income tax |
| HSA | Non-medical after 65 | Income tax only |
What Should You Check on Exam Day?
- Match each account to its purpose: 529 and Coverdell for education, UTMA/UGMA for any purpose benefiting the minor, HSA for medical expenses.
- Only the HSA is funded with pre-tax or deductible dollars; the other three are funded after-tax.
- The UTMA/UGMA minor is the only true owner of the assets; the other three accounts retain owner or custodian control.
- Non-qualified penalties differ: 10% on earnings for 529/Coverdell, 20% for HSA before age 65, no equivalent penalty concept for UTMA/UGMA.
- Deadlines differ by account: Coverdell contributions must stop before age 18 and funds must be used by age 30; the other three have no such age deadline.