Coverdell Education Savings Account (CESA)
Are you a parent looking for an account to assist your children with
their education expenses? A Coverdell Education Savings Account (CESA)
is an account created as an incentive to help families save for their
children's education expenses. Don't wait, paying for college can be a
daunting task, and choosing an education savings account can be tricky.
FNCB is here to assist!
Funds deposited in the account grow tax free until distributed.
There is no limit on the number of separate Coverdell ESAs that can be
established for a designated beneficiary. However, the total
contributions for the beneficiary in any year cannot exceed $2,000.
The designated beneficiary can be changed to a member of the
beneficiary's family. There are no tax consequences if, at the time of
the change, the new beneficiary is under age 30.
You can set up and make contributions to a Coverdell Education Savings
Your modified adjusted gross income (MAGI) is less than $110,000
($220,000 if filing a joint return).
The designated beneficiary must be under age 18 when the account is
established and when the contribution is made.
Contributions must be made in cash.
FNCB CESA funds are invested in Certificates of Deposit.
Distributions can be taken at any time.
Distributions are tax-free as long as the distributions do not exceed
the beneficiary's adjusted qualified education expenses for the year.