Coverdell Education Savings Account

A Coverdell Education Savings Account (also known as an Education Savings Account (ESA), and formerly known as an Education IRA) is a tax-advantaged trust or custodial account created to help pay future qualified educational expenses for the account beneficiary.

Contributions to a Coverdell ESA are not tax-deductible; however, the money grows tax-free when used to pay for a child's qualified educational expenses which could include:

• tuition
• required books
• fees
• room and board costs

Coverdell ESAs may be used for qualified elementary and secondary schooling as well as post-secondary school expenses.

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) has increased the amount that individuals can contribute to a Coverdell Savings Education Account. To find out how much can be contributed, visit our plan limits page. Find out more about changes brought on by EGTRRA.

For more information about Coverdell Education Savings Accounts and other retirement plans, visit our Frequently Asked Questions.