Coverdell Education Savings Accounts
Adults can start saving for their child’s education at any time! A withdrawal is tax free when you use it to pay for qualified elementary, secondary and higher education expenses.
- Any adult – parents, grandparents, godparents or friends – can put money in a Coverdell Education Savings Account, up to $2,000 away each year (up to the tax filing deadline of April 15th) per child (income eligibility requirements apply).
- All account earnings accumulate on a tax-deferred basis and can be withdrawn from the account tax-free if used to pay for qualified elementary and secondary education, as well as qualified college education expenses.
- Consult your tax advisor or IRS Publication 590 to determine what type of IRA is right for you. Publication 590 can be found at your local post office or online at the Internal Revenue Service Website.