Earnings on distributions not used to pay for the beneficiary's qualified education expenses are included in the beneficiary's taxable income and subject to a 10% tax penalty.

Qualified education expenses are for primary, secondary, and postsecondary education expenses, including tuition, fees, tutoring, books, supplies, related equipment, room and board, uniforms, transportation and computers. 

The balance of the account must be distributed within 30 days after the beneficiary reaches the age of 30.