Coverdell Education Savings Account

When you save with a CESA, your earnings grow tax-deferred.

Contributions are not tax-deductible, but as long as you spend the money on tuition, fees, books or other federally-approved education-related expenses, withdrawals may be tax free.

Any taxable distributions (amounts not used for qualified educational expenses) may result in a 10% penalty and tax on the earnings.

The maximum annual contribution is $2,000 per student, per year until the child's 18th birthday.

Your adjusted gross income may limit your contribution amount as detailed in the contribution limit chart.

Contribution Limits for Coverdell Education Savings Accounts

There may be several methods to remedying an excess contribution, but it’s always best to consult a certified tax advisor to find which solution works best for your situation. Contact us to learn about your excess contribution options with Janus Henderson.

The minimum initial investment to open an CESA at Janus Henderson is $100 with an automatic investment of at least $50. Without an automatic investment, the minimum initial investment is $1,000. Subsequent one-time purchases must be at least $50.

Yes, you can contribute to a Coverdell Education Savings Account (CESA) for a specific tax year starting January 1 of that year and you must make all contributions for the tax year by the tax filing deadline, which is typically April 15 of the following year.

Generally, you cannot make contributions after that date even if you file an income tax extension.

Contributions cannot be made after the child reaches age 18, unless the child is a special needs student. Funds must be disbursed or rolled over by the child's 30th birthday. Accounts can potentially be rolled over to another immediate family member under the age of 30, if needed.

There is no cost to open an account and no annual maintenance fees when account minimum thresholds are met.