Park State Bank & Trust

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Coverdell Education Savings Account (ESA)

PRODUCT DESCRIPTION:

An ESA is an investment tool designed to pay for a child's education. The plan allows total contributions of $2,000 per year for each child until the age of 18, or older if the child has special needs.

The contributions are not tax-deductible, but the interest earned and subsequent withdrawals are income tax free and IRS penalty-free when used for qualified educational expenses, including tuition, fees, books, supplies, and equipment.

FEATURES AND BENEFITS:

Who may contribute to Coverdell Education Savings Accounts?
Almost anyone may contribute including parents, grandparents, other relatives, even friends.
How much may be contributed to Coverdell Education Savings Accounts?
There are two key limitations:
- Each child can receive a total of $2,000 per year from all contributors combined. Contributions may be made to a single account or to multiple accounts benefiting the same child, but the total cannot exceed $2,000 per child.
- The amount that may be contributed is reduced if the Modified Adjusted Gross Income (MAGI) is over $95,000 for an individual tax return filer, or over $190,000 for joint filers. No contribution is allowed for single filers with MAGI over $110,000 and joint filers with MAGI over $220,000.
How do I open a Coverdell Education Savings Account?
At this time, IRA accounts can only be opened at our branch locations.