A Coverdell Education Savings Account (ESA) is a simple, efficient and effective 
way of saving for the future education needs of your children, grandchildren, 
nieces or nephews.

Purpose:

• The funds in the ESA are used to pay for qualified education expenses for 
primary and secondary (K-12), technical, college or post-graduate education

• Qualified expenses may include1:        

• Tuition 

• Fees    

• Academic tutoring

• Special needs services

• Books and supplies

• Room and board

• Uniforms

• Transportation       

• Educational computer technology or equipment

• Internet access

Features:

• Interest accrues tax free

• Distributions (i.e., withdrawals) for qualified expenses are tax free

• Balances can be rolled over or transferred to another ESA for the benefit of another qualified family member

• FDIC Insured

Eligibility Requirements & Contribution Limits:

• An ESA may be established and funded for a designated beneficiary (child) under the age of 18

• Any individual (parent, grandparent, aunt, uncle, etc.) may contribute (i.e., deposit funds) on behalf of a designated beneficiary (child) if the individual meets certain income thresholds based on Modified Adjusted Gross Income (MAGI). Contribution limits apply.

• Any entity (non-individuals) may also contribute on behalf of a designated beneficiary (MAGI limits do not apply)

• Annual after-tax contributions per designated beneficiary (child) apply

• Specific guidelines for Special Needs beneficiaries (child) apply

Coordination with Other Tuition Programs:

• A Hope or Lifetime Learning Credit can be claimed in the same taxable year that 
a Coverdell ESA distribution is taken. The distribution cannot cover the same expenses claimed for the Hope or Lifetime Learning Credit

• A contribution can be made to both a Coverdell ESA and a qualified state tuition program (i.e. 529 Plan) on behalf of the same designated beneficiary

This handout is accurate as of the date of printing. However, Comerica Bank reserves the right to make subsequent changes at any time with regard to any matter covered in this handout due to changes in policy, law, regulation or otherwise. Information contained herein should not be construed as tax advice. Please consult with your tax advisor before investing in any education savings plan.