A CESA is a trust or custodial account set up in the United States solely for the purpose of paying qualified education expenses for the designated beneficiary of the account. In general, the designated beneficiary of a CESA can receive tax free distributions to pay qualified education expenses. The distributions are tax free to the extent the amount of the distributions do not exceed the beneficiary's qualified education expenses. If a distribution does exceed the beneficiary's qualified education expenses, a portion of the distribution is taxable. For information on how to determine the part of any distribution that is taxable earnings, refer to Publication 970, Tax Benefits for Education.
Only $500 opening deposit
No minimum balance requirement Contributions can be made up to $2,000 annually until the child's 18th birthdayFunds in existing Coverdell ESA can be designated for a new beneficiary if not used for educational purposes by original owner.
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