{"id":20708,"date":"2017-06-14T12:00:00","date_gmt":"2017-06-14T12:00:00","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/"},"modified":"2023-08-29T08:38:27","modified_gmt":"2023-08-29T13:38:27","slug":"education-savings-accounts","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/","title":{"rendered":"Education Savings Accounts"},"content":{"rendered":"<p>Coverdell education savings accounts (ESAs) are tax-advantaged accounts that allow you to save money for education<\/p>\n<p>Advantages are:<\/p>\n<ul>\n<li>The earnings are tax-free if used for qualified education expenses.<\/li>\n<li>You can use the ESA:\n<ul>\n<li>To pay for education expenses at eligible schools<\/li>\n<li>For every level of education &#8212; from kindergarten to graduate school<\/li>\n<\/ul>\n<\/li>\n<li>Qualified distributions are tax-free.<\/li>\n<\/ul>\n<p>You can&#8217;t deduct contributions to Coverdell ESAs, so don&#8217;t report them on your return.<\/p>\n<p>You open a Coverdell ESA for the benefit of another person. This is usually your child. However, the beneficiary doesn&#8217;t have to be your child or even a relative.<\/p>\n<p>The beneficiary usually must be under age 18 at the time of the contribution. However, the age limit is waived for certain special-needs beneficiaries. This includes individuals who require more time to complete their education because of:<\/p>\n<ul>\n<li>Learning disabilities<\/li>\n<li>Certain physical, mental, or emotional conditions<\/li>\n<\/ul>\n<p>Here are the rules for contributing to an ESA:<\/p>\n<ul>\n<li>You can contribute to as many Coverdell ESAs as you want. You can contribute up to $2,000 per child per year. This is true no matter how many accounts exist or how many people contribute.<\/li>\n<li>The $2,000 contribution limit is an overall limit on contributions per child. However:\n<ul>\n<li>You must contribute less if your modified AGI is more than:\n<ul>\n<li>$95,000 on a single return<\/li>\n<li>$190,000 if married filing jointly<\/li>\n<\/ul>\n<\/li>\n<li>If your modified AGI is $110,000 or more &#8212; or $220,000 if married filing jointly &#8212; you can&#8217;t make contributions. Modified AGI for this purpose is AGI plus income excluded since it&#8217;s:\n<ul>\n<li>Subject to the foreign earned-income exclusion<\/li>\n<li>Subject to a foreign housing exclusion or deduction<\/li>\n<li>Excluded income of bona fide residents of American Samoa or Puerto Rico<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li>You must make your contribution by your return&#8217;s due date (usually April 15).<\/li>\n<li>You can contribute to both an ESA and a qualified state tuition plan for the same child in the same year.<\/li>\n<li>When a beneficiary reaches age 30 or dies, you must roll over assets remaining in the ESA to another qualified beneficiary within 30 days. However, this doesn&#8217;t apply to special-needs beneficiaries.<\/li>\n<li>If you qualify, you can claim an education credit the same year you make an ESA withdrawal.<\/li>\n<li>You can change the ESA beneficiary without tax consequences. You might want to do this if a child graduates or reaches age 30, and there&#8217;s still money in the account. The new beneficiary must be:\n<ul>\n<li>A member of the same family as the former beneficiary<\/li>\n<li>Under age 30 or a special-needs beneficiary at the time of the change<\/li>\n<\/ul>\n<\/li>\n<li>You can change the ESA beneficiary by one of these means:\n<ul>\n<li>Having the trustee change the name on the account, if permitted under the plan rules<\/li>\n<li>Rolling the ESA over into another ESA of an eligible beneficiary<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Eligible educational institutions<\/b><\/p>\n<p>For ESA purposes, a postsecondary eligible educational institution must be:<\/p>\n<ul>\n<li>An accredited public or private institution<\/li>\n<li>Eligible to participate in U.S. Department of Education Federal Student Aid programs<\/li>\n<\/ul>\n<p>Institutions include:<\/p>\n<ul>\n<li>College or university<\/li>\n<li>Vocational school<\/li>\n<li>Other postsecondary educational institutions<\/li>\n<li>Foreign institutions listed at www.fafsa.ed.gov<\/li>\n<\/ul>\n<p>An elementary and secondary educational institution:<\/p>\n<ul>\n<li>Is a public, private, or religious school, as determined under state law<\/li>\n<li>Provides elementary or secondary education (kindergarten through grade 12)<\/li>\n<\/ul>\n<p><b>Qualified education expenses<\/b><\/p>\n<p>For ESA purposes, the definition of &#8220;qualified education expenses&#8221; depends on if the expenses are for:<\/p>\n<ul>\n<li>Elementary and secondary education<\/li>\n<li>Postsecondary education<\/li>\n<\/ul>\n<p>If the ESA distribution is for a postsecondary school, these expenses qualify for the deduction:<\/p>\n<ul>\n<li>Expenses required for enrollment or attendance, like:\n<ul>\n<li>Tuition and fees<\/li>\n<li>Books<\/li>\n<li>Supplies and equipment<\/li>\n<\/ul>\n<\/li>\n<li>Special-needs services for a special-needs student incurred in connection with enrollment or attendance<\/li>\n<li>Room and board incurred by a student enrolled for at least half the full-time academic workload. The costs must not be more than the greater of:\n<ul>\n<li>Allowance for room and board &#8212; This is determined by the eligible educational institution for a particular academic period.<\/li>\n<li>Amount charged if the student resides in housing owned or operated by the eligible educational institution<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>If the distribution is for an elementary or secondary school, these expenses qualify for the deduction:<\/p>\n<ul>\n<li>Expenses incurred with enrollment or attendance:\n<ul>\n<li>Tuition and fees<\/li>\n<li>Books<\/li>\n<li>Supplies and equipment<\/li>\n<li>Academic tutoring<\/li>\n<li>Special-needs services for a special-needs student<\/li>\n<\/ul>\n<\/li>\n<li>Expenses required or provided with attendance or enrollment:\n<ul>\n<li>Room and board<\/li>\n<li>Uniforms<\/li>\n<li>Transportation<\/li>\n<li>Supplementary items and services, including extended day programs<\/li>\n<\/ul>\n<\/li>\n<li>Computer technology purchases used by the child and the child&#8217;s family during the years the child is in elementary or secondary school. This includes:\n<ul>\n<li>Equipment, like hardware<\/li>\n<li>Software &#8212; however, not software designed for sports, games, or hobbies, unless it&#8217;s mostly educational in nature.<\/li>\n<li>Internet access<\/li>\n<li>Related computer services<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Subtract nontaxable education benefits the child receives from the qualified expenses you can use the ESA to pay for. This includes scholarships or Pell grants.<\/p>\n<p>To learn more, see Publication 970: Tax Benefits for Education at www.irs.gov.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Coverdell education savings accounts (ESAs) are tax-advantaged accounts that allow you to save money for education Advantages are: The earnings are tax-free if used for qualified education expenses. You can use the ESA: To pay for education expenses at eligible schools For every level of education &#8212; from kindergarten to graduate school Qualified distributions are [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[24,50],"tags":[],"class_list":["post-20708","post","type-post","status-publish","format-standard","hentry","category-income","category-other-income"],"acf":[],"yoast_head":"<title>Education Savings Accounts | H&amp;R Block<\/title>\n<meta name=\"description\" content=\"What are education savings accounts, and how do they affect your taxes? Discover more about ESAs and get tax answers at H&amp;R Block.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Education Savings Accounts\" \/>\n<meta property=\"og:description\" content=\"What are education savings accounts, and how do they affect your taxes? Discover more about ESAs and get tax answers at H&amp;R Block.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\" \/>\n<meta property=\"og:site_name\" content=\"H&amp;R Block\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/hrblock\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/hrblock\" \/>\n<meta property=\"article:published_time\" content=\"2017-06-14T12:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-29T13:38:27+00:00\" \/>\n<meta name=\"author\" content=\"H&amp;R Block\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@HRBlock\" \/>\n<meta name=\"twitter:site\" content=\"@hrblock\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"H&amp;R Block\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\"},\"author\":{\"name\":\"H&amp;R Block\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/0451551be86ad17708cdd08a71391fcf\"},\"headline\":\"Education Savings Accounts\",\"datePublished\":\"2017-06-14T12:00:00+00:00\",\"dateModified\":\"2023-08-29T13:38:27+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\"},\"wordCount\":808,\"articleSection\":[\"Income\",\"Other income\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\",\"url\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\",\"name\":\"Education Savings Accounts | H&R Block\",\"isPartOf\":{\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/#website\"},\"datePublished\":\"2017-06-14T12:00:00+00:00\",\"dateModified\":\"2023-08-29T13:38:27+00:00\",\"author\":{\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/0451551be86ad17708cdd08a71391fcf\"},\"description\":\"What are education savings accounts, and how do they affect your taxes? Discover more about ESAs and get tax answers at H&R Block.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.hrblock.com\/tax-center\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Education Savings Accounts\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/#website\",\"url\":\"https:\/\/www.hrblock.com\/tax-center\/\",\"name\":\"H&amp;R Block\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.hrblock.com\/tax-center\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/0451551be86ad17708cdd08a71391fcf\",\"name\":\"H&amp;R Block\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/BlockAuthor.jpg\",\"url\":\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/BlockAuthor.jpg\",\"contentUrl\":\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/BlockAuthor.jpg\",\"caption\":\"H&amp;R Block\"},\"sameAs\":[\"http:\/\/hrblock.com\",\"https:\/\/www.facebook.com\/hrblock\",\"https:\/\/x.com\/HRBlock\"]}]}<\/script>","yoast_head_json":{"title":"Education Savings Accounts | H&R Block","description":"What are education savings accounts, and how do they affect your taxes? Discover more about ESAs and get tax answers at H&R Block.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/","og_locale":"en_US","og_type":"article","og_title":"Education Savings Accounts","og_description":"What are education savings accounts, and how do they affect your taxes? Discover more about ESAs and get tax answers at H&R Block.","og_url":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/","og_site_name":"H&amp;R Block","article_publisher":"https:\/\/www.facebook.com\/hrblock","article_author":"https:\/\/www.facebook.com\/hrblock","article_published_time":"2017-06-14T12:00:00+00:00","article_modified_time":"2023-08-29T13:38:27+00:00","author":"H&amp;R Block","twitter_card":"summary_large_image","twitter_creator":"@HRBlock","twitter_site":"@hrblock","twitter_misc":{"Written by":"H&amp;R Block","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/#article","isPartOf":{"@id":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/"},"author":{"name":"H&amp;R Block","@id":"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/0451551be86ad17708cdd08a71391fcf"},"headline":"Education Savings Accounts","datePublished":"2017-06-14T12:00:00+00:00","dateModified":"2023-08-29T13:38:27+00:00","mainEntityOfPage":{"@id":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/"},"wordCount":808,"articleSection":["Income","Other income"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/","url":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/","name":"Education Savings Accounts | H&R Block","isPartOf":{"@id":"https:\/\/www.hrblock.com\/tax-center\/#website"},"datePublished":"2017-06-14T12:00:00+00:00","dateModified":"2023-08-29T13:38:27+00:00","author":{"@id":"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/0451551be86ad17708cdd08a71391fcf"},"description":"What are education savings accounts, and how do they affect your taxes? Discover more about ESAs and get tax answers at H&R Block.","breadcrumb":{"@id":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.hrblock.com\/tax-center\/income\/other-income\/education-savings-accounts\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.hrblock.com\/tax-center\/"},{"@type":"ListItem","position":2,"name":"Education Savings Accounts"}]},{"@type":"WebSite","@id":"https:\/\/www.hrblock.com\/tax-center\/#website","url":"https:\/\/www.hrblock.com\/tax-center\/","name":"H&amp;R Block","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.hrblock.com\/tax-center\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/0451551be86ad17708cdd08a71391fcf","name":"H&amp;R Block","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/BlockAuthor.jpg","url":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/BlockAuthor.jpg","contentUrl":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/BlockAuthor.jpg","caption":"H&amp;R Block"},"sameAs":["http:\/\/hrblock.com","https:\/\/www.facebook.com\/hrblock","https:\/\/x.com\/HRBlock"]}]}},"_links":{"self":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/posts\/20708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/comments?post=20708"}],"version-history":[{"count":0,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/posts\/20708\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/media?parent=20708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/categories?post=20708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/tags?post=20708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}