Savings

The IRS created the Coverdell Education Savings Account (ESA) to encourage and incent parents and students to save for education expenses. The total contributions for an ESA beneficiary cannot be more than $2,000¹ in any year, no matter how many accounts have been established. A beneficiary is someone who is younger than age 18 or has special needs. Contributions can be made until the 18th birthday of the child.

Why a Coverdell ESA?

• Earnings on investments in a Coverdell ESA are not taxed²
• All funds withdrawn are tax-free as long as they are used for qualified education expenses for secondary school or higher education
• Qualified expenses include books, tuition and school-related expenses such as transportation, computers, and room and board
• Applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses

Contact us for an informational brochure.

¹ There are contribution limits for taxpayers based on the contributor’s Modified Adjusted Gross Income.

² Subject to minimal conditions. Check with your tax advisor.