Coverdell Education Savings Accounts (ESAs)

Coverdell Education Savings Accounts (ESAs) can help you save for higher education. The annual contribution limit is $2,000, but income limits apply. To see if you qualify, see below. Contributions for tax year 2019 may be made as late as the April tax filing deadline in 2020.

Funds withdrawn from a Coverdell ESA (both contributions and earnings) are tax free if used to pay for the child's qualified education expenses. In addition to college expenses, funds can help pay for your child's elementary and secondary school expenses. Tax-free distributions are not allowed if an education credit is used for the same expenses for the same student.

Grandparents and other family members may make contributions for your children. Corporations and other entities can make contributions as well. So even if you don't qualify, your children can still benefit. However, total contributions received by one child cannot exceed $2,000, regardless of who makes the contributions.

Provision Single Married Filing Jointly

Child Tax Credit1

Starts at $200,000 AGI2

Starts at $400,000 AGI2

Adoption Credit

$211,160 - $251,160 AGI

Same as single

Interest on Education Loans

$70,000 - $85,000 AGI

$140,000 - $170,000 AGI

Education Tax Credits
(a) Hope Scholarship Credit
(b) Lifetime Learning Credit

(a) Starts at $80,000 AGI
(b) Starts at $58,000 AGI

(a) Starts at $160,000 AGI
(b) Starts at $116,000 AGI

Coverdell Education Savings Accounts

$95,000 - $110,000 AGI

$190,000 - $220,000 AGI

Education Savings Bonds

$81,100 - $96,100 AGI

$121,600 - $151,600 AGI

Individual Retirement Accounts (IRAs)
Active participants in another plan $64,000 - $74,000 AGI $103,000 - $123,000 AGI3
Not an active plan participant No limitations apply $193,000 - $203,000 AGI4
Contributory Roth IRAs $122,000 - $137,000 AGI $193,000 - $203,000 AGI

1. The credit is reduced by $50 for each $1,000, or fraction thereof, of AGI above the threshold.

2. AGI is adjusted gross income. Different modifications may apply depending on the specific provisions.

3. Applies when both spouses are active plan participants or only the participant spouse contributes.

4. Applies if at least one spouse is not an active participant.