Coverdell Education Savings Accounts

These savings accounts offer an alternative to 529 plans.

The following pages provide extensive guidance on Coverdell Accounts, formerly known as education IRAs.

Coverdell Accounts Overview
An introduction to Coverdell education savings accounts.

How a Coverdell Account Works
Learn how Coverdell education savings accounts work.

Starting a Coverdell Account
It’s easy to get started.

Contributions to Coverdell Accounts
Who can contribute, and how much.

Investments in Coverdell Accounts
What’s allowed, and what’s not.

Earnings and Losses in Coverdell Accounts
Learn how earnings are treated, and whether you can take advantage of losses.

Tax-Free Withdrawals from Coverdell Accounts
Follow these rules to take money out without paying tax.

Using Coverdell Accounts with Other Tax Breaks
Learn whether you can use other education-related tax breaks.

Taxable Withdrawals and Penalty Rules
Here’s what happens if you take money out without qualifying for a tax-free withdrawal.

Moving a Coverdell Account
Need to move a Coverdell Account? Here’s how.

Changing the Beneficiary of a Coverdell Account
The beneficiary can be changed, but there are restrictions.

Special Needs Beneficiary of a Coverdell Account
Rules that apply when the beneficiary has special needs.

Estate and Gift Tax Treatment of a Coverdell Account
How transfer taxes apply to Coverdell accounts.

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