The Coverdell Education Savings Account (CESA), formerly known as the Education IRA, allows individuals or other entities to contribute funds towards a child’s education. The child on whose behalf a CESA is established and maintained is referred to as the designated beneficiary.
Eligibility and Contributors
- Anyone (even non-individuals) can be a CESA contributor
- Contribution limits for individual contributors are subject to Modified Adjusted Gross Income (MAGI) Ranges, see table below
- Income limits for non-individuals do not apply
- Contributions are not tax deductible
- Contributions for the previous tax year may be made up to April 15th of the current year
| Filing Status/ Contribution Amount |
All Other Filers |
Joint Filer MAGI |
|---|---|---|
| Full $2,000 Contribution |
Less than $95,000 | Less than $190,000 |
| Partial Contribution | $95,000 – $110,000 | $190,000 – $220,000 |
| No Contribution | $110,000 + | $220,000 + |
Distributions for qualified education expenses are tax and penalty free.
Qualified education expenses include expenses required by public, private or religious elementary and secondary schools, and higher education expenses. Contributions made to a qualified tuition program (also known as 529 plans) from CESA assets are also qualified expenses.
Contact a branch office nearest you for more information.