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Education Planning

Coverdell Education Savings Accounts

The Coverdell Education Savings Account (ESA) is an education funding account that allows for tax-free withdrawals to pay for qualified expenses for all school levels–kindergarten through high school, as well as college and graduate school.

Growth of Earnings

Tax Issues

  • Contributions not tax deductible
  • Interest grows free of taxes
  • Distributions excluded from gross income if funds are used for qualified education expenses
  • 10% penalty will be assessed, as well as ordinary income taxes, on the earnings portion of the distribution if the money is used for non-education purposes.

Eligible Distributions

  • Tuition, fees, books, supplies and equipment for attendance of the student in an eligible education institution
  • Minimum room and board allowance determined by the institution
  • Expenses related to kindergarten through high school, undergraduate and graduate-level college courses

For more information, please contact your Financial Advisor.

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