Coverdell Education Savings Account

(redirected from Education Savings Accounts)
Also found in: Acronyms.

Coverdell Education Savings Account

An account into which one may deposit funds on a tax-deferred basis, on the assumption that they will be used to pay for the education of the account holder. The funds are invested in a portfolio, much like an IRA or another retirement account. If the funds are in fact used for education, withdrawals from a Coverdell account are tax-exempt up to the total cost of education. Importantly, any tax liability on a Coverdell account is assessed at the account holder's bracket, rather than the contributor's. This protects the account holder from an excessive tax liability in the event a wealthy parent made most or all of the contributions. It was formerly called an education IRA.

Coverdell Education Savings Account

A special individual retirement account opened on behalf of a child under age 18. Contributions of up to $2,000 annually may be made by anyone who meets specified income limits. Contributions are not tax-deductible, but earnings grow tax-deferred until withdrawn. Money withdrawn prior to the child turning age 30 to pay for elementary, secondary, or postsecondary education expenses after high school is not subject to federal income tax. Formerly called Education IRA.

Coverdell Education Savings Account (ESA)

A tax-favored savings plan under which any number of taxpayers may contribute up to a total of $2,000 per year per eligible beneficiary. Contributions are nondeductible. Earnings withdrawals are tax free and penalty free if they do not exceed the amount of qualified education expenses for the year.
References in periodicals archive ?
PHOENIX, March 29, 2012 /PRNewswire-USNewswire/ --The Arizona legislature today passed a plan that would expand the state's education savings accounts program, a first-of-its-kind school choice program offering parents an unprecedented level of choice in their children's education.
4, 2013 /PRNewswire-USNewswire/ -- The American Federation for Children-the nation's voice for educational choice-today praised the introduction of bipartisan legislation in the Arizona House of Representatives that would significantly strengthen the state's education savings accounts program, a one-of-a-kind private school choice program that gives families unprecedented control over their children's education.
Today SCH announced that it has eliminated the account service fees for clients with brokerage accounts, education savings accounts, custodial accounts, and college saver accounts for clients who have at least $25,000 in assets with the company.
Following a year that saw educational choice expansions that included continued growth of public charter schools, public school choice, and expansions of options like education savings accounts and virtual schools, the Yearbook chronicles how much of the education reform successes in 2012 were made possible as a result of private school choice gains.
The College Savings Option Tool helps investors determine the most appropriate type of college savings vehicle for their needs, including 529 plans, Uniform Gift/Transfer to Minors Act accounts (UGMAs/UTMAs), Education Savings Accounts (ESAs), and mutual funds.
The minimum initial investment for the Investor Shares is $3,000 for taxable accounts, IRAs, and custodial accounts for minors, and $2,000 for education savings accounts.
In the 2013-14 school year, students receiving school vouchers, scholarships funded by donors who can receive offsetting tax credits, or education savings accounts grew to more than 301,000, from 260,000 the prior year.
The pre-college savings group includes Coverdell Education Savings Accounts (ESAs) (formerly known as Education IRAs), 529 College Savings Plans and Pre-Paid Tuition Programs, Education Savings Bond Program, Uniform Gift to Minors Accounts (UGMAs), and Uniform Transfer to Minors Accounts (UTMAs).
Retirement Plans do not include individual retirement vehicles, such as Traditional and Roth IRAs, Coverdell Education Savings Accounts, individual 403(b)(7) custodian accounts, Keogh plans or Section 529 college savings accounts.
This rate, which represents a bump of 10 basis points, applies to a number of the credit union's deposit products, including its regular, supplemental and Kidz Klub savings accounts, as well as its IRAs and Coverdell Education Savings accounts.
While taxpayers have focused lately on the benefits of IRC section 529 qualified tuition plans (QTPs), Coverdell Education Savings Accounts (ESAs) offer an attractive alternative.

Full browser ?