Coverdell Education Savings Account

Opening a KFCU Coverdell ESA for a family member or another designated beneficiary under the age of 18 (or special needs beneficiary) is a great way to save and pay for qualified educational expenses. You may be able to contribute to a Coverdell ESA if your modified adjusted gross income is below established limits (consult a tax advisor). Educational savings accounts do have their limits, though. Contributions to all accounts on a beneficiary’s behalf cannot exceed $2000 in any one year and the contributions are not deductible. Distributions are tax free to the extent that the distributions do not exceed the beneficiary’s qualified education expenses. For more information on the Coverdell Education Savings account, please contact a financial service representative.