• Vermont tax credit of up to $250 per child per year.
• Contributions are not tax-deductible, but earnings are tax-free.
• Withdrawals tax-free if used for qualified higher education expenses.

• Cannot claim American opportunity credit or lifetime learning credit for same expenses for which a "529" program distribution was used.

• Tax credit of up to $2,500 per student for first four years of college.

• Begins to phase out if modified adjusted gross income exceeds $80,000 ($160,000 if married, filing jointly). See IRS publication 970 for guidelines.

Lifetime learning credit

• Tax credit of up to $2,000 per family for an unlimited number of years.

• Begins to phase out if modified adjusted gross income exceeds $50,000 ($100,000 if married, filing jointly). See IRS publication 970 for guidelines.

• Deduction of up to $4,000/year for tuition and certain related expenses.

• Targeted to middle-income parents who may not qualify for American opportunity and lifetime learning tax credits. See IRS publication 970 for guidelines.
• Cannot claim this deduction if you take a American opportunity credit or lifetime learning credit for the same student.

Coverdell Education Savings Accounts (ESA)

(formerly called Education IRAs)

• Contribute up to $2,000/year/child.
• Contributions not tax-deductible, but earnings are tax-free.
• Withdrawals tax-free if used for qualified higher education expenses.

• Cannot claim American opportunity credit or lifetime learning credit for same expenses for which an ESA distribution was used.
• Available to individuals with modified adjusted gross income of $110,000 or less ($220,000 or less for joint filers). See IRS publication 970 for guidelines.

Roth IRA

• Contribute up to $5,000; contributions are not tax-deductible, but earnings are tax-free if held until age 59½.
• Early withdrawal allowed for college expenses.

• See IRS publication 590 for guidelines.

Traditional IRA

• Contribute up to $5,000; contributions are tax-deductible.
• Withdrawals for college allowed; taxed as ordinary income.

• See IRS publication 590 for guidelines.

Student loan interest deduction

• Tax deduction for interest on student or parent education loans.

• Generally not available to upper-income families. See IRS publication 970 for guidelines.

• Interest on certain savings bonds may be tax-free if bond is used to pay education expenses.

• Phases out as modified adjusted gross income exceeds $67,100 ($100,650 if married, filing jointly). See IRS publication 970 for guidelines.