Coverdell Education Savings (ESAs)
ESAs are accounts that allow contributions to be made for the purpose of saving for a child's educational expenses. Qualified withdrawals are tax and penalty free.
Who can contribute?
There is no requirement that the contributor must be a member of the family. Furthermore, corporation and other entities (including tax-exempt organizations) are permitted to make contributions to Coverdell Education Savings Accounts. With this broad range of potential contributors, it is possible that more than one person may want to contribute for the same child. A coordinated effort should be encouraged to avoid excess contributions. Contributions are not allowed after the beneficiary reaches 18 years of age (except those with special needs).