It is a known fact that parents and grandparents are the primary source of financial assistance for college students. A way to help the student in your life is with a Coverdell Education Savings Account (CESA). A CESA allows you to save for qualified education expenses on a tax-favored basis. Here is how it works:
- Contribute up to $2,000 per child, per year.
- There’s no tax deduction for a CESA, but interest accumulates and is distributed tax-free when used to pay for qualified education expenses.
- Funds can be used for qualified higher education as well as qualified K-12 tuition and expenses.
- The beneficiary (child) must be under 18 years of age or have special needs when the CESA is established.
Call or visit any of our locations to open a CESA with the credit union.