A Coverdell Education
Savings Account (CESA),
formerly known as an Education
IRA, is designed to help you set
aside money for the qualified
education expenses of your children,
grandchildren or any other eligible
beneficiaries.
Key features of a Coverdell account
include:
- A choice of investments
- Earnings on contributions are not taxed while they are held in the account
- Neither you nor your beneficiary will pay federal income taxes
on the earnings when the money
is used to pay for qualified expenses
at an eligible educational institution
Changes to the 2002 tax law made
Coverdell accounts more attractive
than ever. Important changes included:
Higher Contribution Limits
Families with adjusted gross incomes of up to $220,000 may save up to $2,000 annually tax-free for education expenses (for single filers, the income cap is $110,000).
Expanded Qualifed Expenses In addition to tuition, fees,
books, supplies, equipment,
and room and board charges,
qualified expenses include:
- Academic tutoring
- Special need services
- Equipment
- Uniforms
- Transportation
- Computer technology or equipment used while attending a public,
private or religious elementary or secondary school (grades
K-12), as well a college or graduate school
Flexible
Contributions
Contributions to a CESA can be
made on behalf of the same beneficiary
during the same tax year for which
qualified contributions are made
to a 529
College Savings Plan.
Extended
Contribution Deadline
The contribution deadline is
for Coverdell accounts is April
15 of the year following the
year for which the contribution
is being made (extended from
December 31).
Potential
Downside
Coverdell savings count against
you when schools award financial
aid because they are held
in the student's name.
Call us at 800-PNC-6111
to schedule an appointment to
discuss your investment needs.
|
Important Investor Information:
Securities and brokerage services are provided by
PNC Investments, a division of J.J.B. Hilliard,
W.L. Lyons, Inc. member NYSE and SIPC. Annuities
and other insurance products are offered by PNC
Insurance Services, Inc. and J.J.B. Hilliard, W.L.
Lyons, Inc., licensed insurance agencies.
