Coverdell Education Savings Accounts
You can have the flexibility of using your savings for your child’s qualified elementary, secondary and higher education expenses. Set money aside to grow tax deferred until distributed when the child reaches 18 years of age.
Details to Consider:
- Total contributions for the account beneficiary cannot exceed $2,000 in any year.
- Contributions are phased out once your adjusted gross income exceeds $220,000 for married couples or $110,000 for individuals.
- Withdrawals are tax free and may be made at any time as long as the money is used for qualified education expenses by the child's 30th birthday.
- Funds may be subject to income tax and a 10% penalty tax once the child reaches 30 years of age.
- You may transfer funds to the ESA of a younger family member under the age of 30.