Updated October 24, 2026. Quick answer: Tax Topic 310 is the IRS page on Coverdell education savings accounts (Coverdell ESAs). It says the total contribution to all accounts for one beneficiary in any year “can’t exceed $2,000”, and that contributions are not deductible.
Quick reference
| Item | What the IRS topic says |
|---|---|
| Purpose of the account | “solely for paying qualified education expenses for the designated beneficiary of the account” |
| Beneficiary at setup | “the designated beneficiary must be under the age of 18 or be a special needs beneficiary” |
| Contribution form | “Contributions must be made in cash, and they’re not deductible.” |
| Yearly total for one beneficiary | “can’t exceed $2,000” |
| Remaining balance deadline | “must be distributed within 30 days after the designated beneficiary reaches age 30” |
| Tax form for distributions | “You should receive a Form 1099-Q” |
What a Coverdell ESA is and how it starts
The IRS topic says “A Coverdell education savings account (Coverdell ESA) is a trust or custodial account set up in the United States”. It adds “This benefit applies not only to qualified higher education expenses, but also to qualified elementary and secondary education expenses.”
The topic lists requirements for setting one up. It says “The account must be designated as a Coverdell ESA when it is created.” It also says “The document creating and governing the account must be in writing, and it must meet certain requirements.”
Contributions
On who can put money in, the topic says “Any individual whose modified adjusted gross income is under the limit set for a given tax year can make contributions.” It also says “Organizations, such as corporations and trusts can also contribute regardless of their adjusted gross income.”
On timing, it says “Contributors must contribute by the due date of their tax return (not including extensions).”
On the number of accounts, it says “There’s no limit to the number of accounts that can be established for a particular beneficiary”. The dollar cap applies across all of them together. For the wider education tax picture, see education credits and the college money and 529 guide.
Distributions and Form 1099-Q
The topic says “In general, the designated beneficiary of a Coverdell ESA can receive tax-free distributions to pay qualified education expenses.” It then says “If a distribution exceeds the beneficiary’s qualified education expenses, a portion of the earnings is taxable to the beneficiary.”
On the end date, it says “If the beneficiary dies before attaining the age of 30, amounts remaining in the account must be distributed within 30 days after the date of death.” It also says “Certain transfers to members of the beneficiary’s family are permitted.”
On reporting, it says “Form 1099-Q should be made available to you by Feb. 2, 2026.” Box by box detail is on the Form 1099-Q boxes 1 to 3 page. For how to figure the taxable part, the topic points to “Chapter 6 of Publication 970, Tax Benefits for Education”.
Where this comes from
This page describes the IRS page titled Topic no. 310, Coverdell education savings accounts, as served on irs.gov on October 24, 2026. The IRS page shows that it was last reviewed or updated on 24 Sep 2026. The IRS can change a topic after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Treating contributions as a deduction. The topic says “Contributions must be made in cash, and they’re not deductible.”
- Reading the $2,000 figure as a per account cap. The topic says it applies to “the total contribution to all accounts on behalf of a beneficiary in any year”
- Assuming the money can sit forever. The topic says “Amounts remaining in the account must be distributed within 30 days after the designated beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary.”
- Assuming every withdrawal is tax free. The topic says tax free treatment holds “to the extent the amount of the distributions doesn’t exceed the beneficiary’s qualified education expenses.”
Related: IRS tax topics by number, Education credits, College money and 529s guide, Form 1099-Q boxes 1 to 3, Form 8863, education credits, and Schedule 3 line 3, education credits.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about education savings
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with Coverdell accounts
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- IRS, Topic no. 310, Coverdell education savings accounts (irs.gov): https://www.irs.gov/taxtopics/tc310
- IRS, Tax topics index (irs.gov): https://www.irs.gov/taxtopics
Read from the IRS pages linked above on October 24, 2026. General information, not tax or legal advice. The IRS topic page and the instructions for your own form control, and your own facts decide the outcome.