Coverdell Education Savings Account (ESA)

esa

Forms and Requests Received Will be Processed in 24-48 hours of Quest Receiving the Form.

The Coverdell Education Savings Account was created to encourage savings to cover future education expenses. An ESA can be used for all qualified educational expenses until the beneficiary reaches the age of 18. Any individual (including the designated beneficiary) can contribute to a Coverdell ESA if the individual’s MAGI for that year is less than $110,000. For individuals filing joint returns, that amount is $220,000. Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. There is no requirement that an organization’s income be below a certain level.

Contributions must meet all of the following requirements:

  • They must be in cash
  • They can’t be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary
  • They must be made by the due date of the contributor’s tax return (not including extensions)

Apart from the qualified education expenses, any assets or cash remaining in an ESA must be distributed when either one of the following two events occurs:

  • The designated beneficiary reaches age 30. In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. However, this rule does not apply if the beneficiary is a special needs beneficiary.
  • The designated beneficiary dies before reaching age 30. In this case, the remaining assets must generally be distributed within 30 days after the date of death.

2018 Contribution Limit: 

  • $2,000 per child per year

Qualified Distributions

Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution.

Eligible Elementary or Secondary School

This is any public, private, or religious school that provides elementary education as determined under state law.

  • Qualified expenses
  • Tuition and fees
  • Books, supplies, and equipment
  • Room and board
  • Uniforms
  • Etc.
  • Eligible Postsecondary school

    This is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education.

  • Qualified expenses
  • Tuition and fees
  • Books, supplies, and equipment
  • Room and board (must be incurred by students who are enrolled at least half-time)
  • [PDF] DOWNLOAD ESA STARTER KIT

    CLICK HERE TO COMPLETE THIS APPLICATION VIA RSIGN

    [PDF] DOWNLOAD (5305) CUSTODIAL AGREEMENT

    Submit Your Forms: All forms can be mailed or faxed to any of our locations or emailed to NewAccounts@QuestIRA.com.