Education savings account

(redirected from Esa)
Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.

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.

Education savings account (ESA).

You can put up to $2,000 a year into a Coverdell education savings account (ESA) that you establish in the name of a minor child. The assets in the account can be invested any way you choose.

There is no limit to the number of accounts you can set up for different beneficiaries, but no more than a total of $2,000 can be contributed in a single beneficiary's name in any one year. If you choose, you may switch the beneficiary of an ESA to another member of the same extended family.

Your contribution is not tax deductible. But any earnings that accumulate in the account can be withdrawn tax free if they're used to pay qualified educational expenses for the beneficiary until he or she reaches age 30. The costs can be incurred at any level, from elementary school through a graduate degree, or at a qualified post-secondary technical or vocational school.

There are no restrictions on using ESA money in the same year the student uses other tax-free savings, or the student, parent, or guardian uses tax credits for educational expenses. But you can't take a credit for expenses you covered with tax-free withdrawals.

To qualify to make a full $2,000 contribution to an ESA, your modified adjusted gross income (MAGI) must be $95,000 or less, and your right to make any contribution at all is phased out if your MAGI is $110,000 if you're a single taxpayer. The comparable range if you're married and file a joint return is $190,000, phased out at $220,000.

References in periodicals archive ?
Moving to the State Land Board--the primary locus of ESA vicarious
ESA's Information Technology and Curriculum teams led the partnership with Citrix and the collaboration with our teachers, directors and leadership to transform the ways we reach students," Mark Claypool, ESA president and CEO, said.
ESA Renewables has positioned itself as a leader in the industry providing turnkey solar PV systems worldwide.
To her credit, Senator Barbara Boxer (D-CA) voted against S 1180 in committee -- one of only three votes against S 1180 (the other two no-votes were from western senators who felt it did not weaken the ESA enough
During previous Congressional sessions, he was unable to bridge the gap between legislators determined to defend the law's current form and those seeking varying degrees of ESA reform.
With his background in emerging markets and experience in operations, sales, and marketing, Esa brings insight and expertise that will be invaluable in his new position, said Mike Bible, CEO, Agility Europe.
The results of the feasibility study were all positive," said Jeffrey Burkett, President of ESA Renewables.
June 2, 2011 /PRNewswire/ -- ESA Renewables, a leading turnkey solar system provider, today announced it will be attending the Intersolar North America 2011 trade show.
Fish and Wildlife Service (USFWS) to court to protect the white-tailed prairie dog, and a March court ruling forces the federal agency to respond to citizens' petitions demanding ESA listing by October of this year.
In the early 1980s, ESA and NASA were set to fly a pair of craft over the sun's north and south poles, simultaneously collecting the first data on the magnetic fields in these uncharted regions.
SAP is investing billions to redesign its flagship R/3 product line based on its ESA, and that ESA will become the standard framework for developing all new SAP ERP applications with NetWeaver
Tenders are invited for: Benchmark cost efficiency for ESACommon IT service delivery at ESA