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.
Qualified Tuition Plan
A Qualified Tuition Program allows you to prepay a student's college tuition or contribute to a higher education savings account.
Education: Received Scholarship
A scholarship is tax free only if: You are a candidate for a degree at an eligible educational institution, and you use the scholarship to pay qualified educational expenses
Education: Received Fellowship
A fellowship is tax free only if you are a candidate for a degree at an eligible educational institution, and you use the fellowship to pay qualified educational expenses.
Education: Credit or Deduction
The education of your children, or even of yourself and your spouse, can be a major investment. Knowing if your college-age child is still a dependent, what scholarships are taxable, and which tax credits are available can be confusing. You need to consider your situation to determine which options are best for you.