Coverdell Education Savings Account (ESAs)

Formerly known as Education IRAs, Coverdell Education Savings Accounts (ESAs) are trusts created exclusively for the purpose of paying the qualified education expenses of the designated beneficiary of the trust. This account allows:

• Contributions up to $2,000 per beneficiary per year until the beneficiary reaches age 18.
  
• Account ownership by the beneficiary or beneficiary’s parent.
  
• Rollovers to the Coverdell account of a family member of the previous beneficiary. (Other restrictions apply.* )

To find out more, contact:

Karen DiBrita
IRA Specialist, NEFCU
(516)-714-2049
dibritak@nassaued.org

Considering other IRA investments or need help with a rollover from another IRA, 401K, 403b or other qualified plan? For more information on mutual funds, stocks, or bonds, contact NEFCU Investment Services

For Current Rates: Click Here

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*$2,000.00 maximum for 2007 and 2008 tax years. There are no age limits for special needs beneficiaries. Contributions are not deductible on federal or state income tax, but earnings accumulate tax-free. Qualified distributions are exempt from federal income tax. Contributions may be made until the due date of the contributor's tax return (normally April 15 of the following year). Non-qualified withdrawals are taxed as ordinary income at donor's rate and subject to a 10% tax penalty. (Non-qualified distributions remain tax-free in cases of death or disability of the beneficiary.) For further information, consult your tax advisor or the IRS website at http://www.irs.gov/