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Coverdell Education Savings Account

Give your children the opportunity to fufill their dreams, consider a Coverdell Education Savings Account and fund their future

A Coverdell Education Savings Account (ESA) is a savings account funded with after-tax contributions for the educational benefit of a child. Almost anyone can make contributions – parents, grandparents, friends, corporations, and tax-exempt organizations. 

The maximum allowable contribution to a child’s ESA is $2,000 each year. So, if you contribute $1,500, additional contributions for that child for the year from other contributors can amount to no more than $500. You can, however, make contributions to the ESAs of as many beneficiaries as you like. Contributions can be made to the account until the child reaches age 18. That age is extended for individuals who require additional time to complete their education as a result of a learning disability or a physical, mental, or emotional condition.

School selection

The assets of a Coverdell account can be used at any elementary (kindergarten through grade 12), secondary, and accredited post-secondary public, private, or religious school.


COUNTRY investment choices include the COUNTRY Mutual Funds and several other selected external funds.


All contributions are made on an after-tax basis, but the contributions do qualify for the annual gift tax exclusion. Also, earnings grow income-tax deferred, and withdrawals to pay for qualified educational expenses (see below) are tax-exempt.

The beneficiary has until 30 days after reaching age 30 to use the money, unless that beneficiary is a special needs beneficiary—an individual who requires additional time to complete his/her education as a result of a learning disability or physical, mental, or emotional condition. Withdrawals not used for educational purposes may be subject to a 10% penalty. Withdrawals of earnings will be included in the beneficiary’s taxable income.

Contributions to an ESA are not considered in calculating contributions to IRAs. Therefore, even if you make the maximum allowable contribution to your IRA, you may still make a contribution to a Coverdell if your income meets the modified adjusted gross income requirements. 

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Ownership and control

The account owner controls the account for the benefit of the beneficiary. However, assets generally become the child's property at 18.

Beneficiary change

The owner can change the beneficiary to another family member as beneficiary. 

Contribution limits

Based upon modified adjusted gross income (MAGI), there are contribution limitations as follows:

Joint Filers

All other Filers1

Contribution Limits

MAGIs under $190,000

MAGIs under $95,000

Full contribution allowed

$190,000 to $220,000

$95,000 to $110,000

Phase-out ranges

MAGIs at or above $220,000

MAGIs at or above $110,000

No contribution allowed

1Corporations and other entities (including tax-exempt organizations) can contribute regardless of income of the entity during the year.

Qualified educational expenses

Covered expenses include:

  • Tuition
  • Books
  • Education equipment (including computers)*
  • Fees
  • Supplies
  • Educational technology (including Internet access & related services)*
  • Academic tutoring*
  • Uniforms*
  • Supplementary items
  • Room and board
  • Transportation*

*Elementary and secondary school expenses only                                                                                      

Do your homework and learn about our other funding options or find a COUNTRY Financial representative near you to get personalized assistance.

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For more information about mutual funds, including charges and expenses, obtain a prospectus from your registered representative. Read it carefully before you invest or forward funds. There are investment risks associated with investing in mutual funds which should be considered carefully before making an investment.

The information contained herein is general and should not be considered legal or tax advice. Laws of particular state and your particular situation may significantly affect the general information presented herein. The availability of the tax or other benefits mentioned above may be conditioned on meeting certain requirements. You should consult your attorney or tax advisor regarding your specific legal or tax situation.

Securities Products offered through COUNTRY Capital Management Company, 1705 N. Towanda Avenue, P.O. Box 2222, Bloomington, IL. Member FINRA External Link /SIPC External Link