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Coverdell Education Savings Account

The Coverdell Education Savings Account (CESA) was designed for the specific purpose of allowing individuals to save money towards a child’s education on a tax-favored basis. Distribution used to pay for qualified education expenses are federal income tax free and penalty tax free.

Requirements

• The designated beneficiary must be under age 18.
• Unable to participate in a state prepaid tuition plan.
• Contributor’s MAGI cannot exceed guidelines.
   

Other features

• No fee for established or maintaining a CESA.
• Contributions for any tax year must be made by December 31 of the same tax year.
• Contributions can be accepted into any Fixed Rate Certificate of Deposit, Variable Rate Certificate of Deposit, Savings Account or Money Market Savings Account at CSB.
• Contribution limits are established in accordance with eligibility as set forth by the IRS.
• The CESA owner is responsible for determining his/her eligibility to contribute to a CEDSA.
• Deductibility is determined by income and/or participation in a pension plan.
• Income is tax free when withdrawn for qualified educational expenses.