A Coverdell Education Savings Account (ESA) is a way to save for your child’s education. Contributions to an ESA are not tax deductible, but the earnings grow tax-deferred and will be tax-free if used for education.
Education Savings Account (ESA) Contribution Limits
|Per year until the child is age 18 unless the child has special needs.||$2,000||$2,000|
Any adult or entity can establish an Education Savings Account (ESA) for any child below the age of 18.
Age exceptions apply for special needs beneficiaries.
There are limits to who may contribute to a Coverdell ESA. Your eligibility is based on your modified adjusted gross income (MAGI) and tax filing status.
Single filers can contribute to a Coverdell account if their MAGI for the year is less than $110,000. For married couples filing a joint return, the MAGI threshold is $220,000. A trust or corporation can also make contributions to a Coverdell account on behalf of an eligible student. The income limits don’t apply to organizations making ESA contributions.