Education
Education Savings Acct
Distributions From a Coverdell ESA
Distributions from a Coverdell ESA are tax free if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year.
Opened Education Savings Account
An education savings account can be established for a child under the age of 18. Any individual (including the child) can contribute to the account during the year if they meet certain income limitations. The total annual contributions per beneficiary are limited to $2,000. Withdrawals will be tax-free when used to pay education costs (elementary school, secondary school, or a post-secondary school such as a college) for the beneficiary.
Tax Benefits of Education Savings Account
Contributions to a Coverdell Education Savings Account are not deductible, but the deposits in the account grow tax free until distributed.