Education IRA contribution last day(age 18)

[Guest AFRICA6796]

IRC 530 (B)(1)(A)(ii), states

(A) No contribution will be accepted -

(ii) after the date on which such beneficiary attains age 18.

This seems to suggest that contributions should not be accepted AFTER the day on which the individual attains the age of 18.

IRS Form 5305-EA as well and IRA publication 570 states that “You may be able to contribute up to $500 cash each year to an education IRA for a child UNDER age 18.”

This seems to say the contribution must be made BEFORE the 18th birthday.

Would you agree there is a conflict?

I know it is just one day’s difference, but…

[Gary Lesser]

Suppose an individual (other than a special needs beneficiary) reaches their 18th birthday on December 31, 2002. Although I agree that January 1, 2003 is the first "date" after the individual's bithday, the statute must also be interpreted in accordance with Congressional intent; which states: ... "Such contributions may not be made after the designated beneficiary or account holder reaches age 18." Arguably (the IRS view), the individual attains age 18 the moment December 30th ended; thus, the individual already attained age 18 on his or her birthday and that date (December 31) is after the individual reached age 18. Note that the Conference Committee Report did not contain the words "after the date," using instead "after...reaches age 18." Arguably, you and the the IRS are correct in your interpretations (it's too late). Since the IRS has reasonably interpreted the statute, ther is no longer any conflict.

[Guest AFRICA6796]

Thanks Gary.

This makes so much sense

[Gary Lesser]

I was recently informed that UNDER insurance law an individual is deemed to attain a given age at 12 p.m. the day before his/her birthday is celebrated. (No cite provided)

I'd appreciate any additional comments, especially citations on this subject.