What is the Coverdell ESA contribution limit?

The two yearly limits

Publication 970 frames the limit as two ceilings. The first is on the total that can be contributed for each designated beneficiary in any year: for 2025, all contributions from all sources to all Coverdell ESAs set up for one beneficiary cannot exceed $2,000. Rollovers are handled separately. The second is on what any one individual can contribute for one beneficiary, which is also $2,000 but is cut down by the contributor's own income. The publication's example has three accounts opened for a baby by the parents, a grandparent and an aunt: if the grandparent puts in the full $2,000 nobody else can contribute to any of the three; if the parents put in $1,000 and the aunt $600, the grandparent can add no more than $400. A sibling's separate account has its own $2,000 limit.

The income phase-out

Any individual, including the designated beneficiary, can contribute only if MAGI is less than $110,000 ($220,000 on a joint return). Between $95,000 and $110,000 (single, head of household and similar) or $190,000 and $220,000 (joint), the $2,000 is gradually reduced; at or above the upper figure you cannot contribute to anyone's Coverdell ESA. To figure the limit, multiply $2,000 by a fraction whose numerator is your MAGI minus $95,000 ($190,000 if joint) and whose denominator is $15,000 ($30,000 joint), then subtract the result from $2,000. The publication's example is a single filer with MAGI of $96,500, who can contribute $1,800 per beneficiary. For a joint filer with MAGI of $205,000, the fraction is $15,000 / $30,000 = 0.5 and the limit is $1,000.

MAGI here is generally the adjusted gross income on Form 1040 line 11a, increased by any foreign earned income exclusion, foreign housing exclusion or deduction, and excluded income of bona fide residents of American Samoa or Puerto Rico. Worksheet 6-1 in the publication adds those back.

Rules for the contribution itself

Contributions must be in cash, cannot be made after the beneficiary reaches age 18 unless the beneficiary is a special needs beneficiary, and must be made by the due date of the contributor's tax return, not counting extensions. A contribution made for the preceding tax year, for example in February 2026 and designated as a 2025 contribution, is treated as made on December 31, 2025. Contributions are not deductible. Organizations such as corporations and trusts can also contribute and the income test does not apply to them.

The publication also says the account document must restrict the trustee: only cash, only before age 18 for most beneficiaries, never above $2,000 for the year, no life insurance investments, and the balance must generally be distributed within 30 days after the beneficiary reaches 30 or dies, unless the beneficiary is special needs. You can contribute to a Coverdell ESA and a 529 plan for the same beneficiary in the same year without penalty.

Worked example

A married couple filing jointly have MAGI of $200,000 and want to fund accounts for two children. Their phase-out fraction is ($200,000 - $190,000) / $30,000 = 0.333, so each child's limit is $2,000 - ($2,000 x 0.333) = $1,334, rounded from $1,333.33. For two children that is about $2,668 in total. Remember the beneficiary cap still applies across every contributor, so if relatives also give, their gifts use up the same $2,000 for that child. Enter your own MAGI above for the figure.

What the account pays for

A Coverdell ESA is the broadest of the education accounts. Its qualified expenses include higher education costs and also K-12 items: tuition, books, supplies and equipment, academic tutoring and special needs services, plus room and board, uniforms, transportation and extended day programs when required or provided by the school. A computer, software or internet access used by the beneficiary and family counts too. That breadth is why some families keep one even with a 529. For the 529 side, see our pages on 529 withdrawals and K-12 tuition.

Sources

• IRS Publication 970, Tax Benefits for Education (2025): Chapter 6, Contributions and Contribution Limits. Read November 2, 2026.

Edition read: Publication 970 (2025), for use in preparing 2025 returns. Dollar limits, income thresholds and dates in this publication are for tax year 2025; check the current publication and form instructions for the year you file. This page summarizes the publication and does not replace it.