Series 7: 16.6.2.1. Coverdell Education Savings Accounts

16.6.2.1. Coverdell Education Savings Accounts

The Coverdell Education Savings Account (CESA or Coverdell ESA) was previously known as the Education IRA. The Coverdell ESA is similar to a 529 college savings plan in that contributions are made with cash in after-tax dollars and all withdrawals can be made tax-free as long as they are used for qualified educational expenses.

Otherwise, though, the Coverdell is much different. First, annual contributions are limited to $2,000 for all Coverdell accounts for a