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Coverdell education savings account

A Coverdell ESA allows you to put up to $2,000 a year in a special account that will be used to pay a student’s school bills. There’s no deduction for contributions but if the money is used to pay qualifying expenses, withdrawals, including accumulated income, are tax-free. The $2,000 cap is the limit on how much can be set aside for any student in one year, regardless of how many people contribute. In addition to being used for college expenses, ESA funds can also be spent for primary and high school bills. Even the cost of a computer is a qualifying expense.

Coverdell ESA
See Coverdell education savings account.
Credit for qualified retirement savings contributions See Retirement credit.