How does the Coverdell ESA affect other education savings incentives?
A. Contributions can be made on behalf of the same child to both a Coverdell ESA and a qualified tuition (section 529) plan. A person can also receive tax-free distributions from a Coverdell ESA in the same year he or she claims the Lifetime Learning or HOPE Scholarship tax credits, but the same expenses cannot be used for more than one of these tax benefits.
A. Contributions can be made on behalf of the same child to both a Coverdell ESA and a qualified tuition (section 529) plan. A person can also receive tax-free distributions from a Coverdell ESA in the same year he or she claims the Lifetime Learning or HOPE Scholarship tax credits, but the same expenses cannot be used for more than one of these tax benefits. This article is not intended as tax advice. Contact a tax professional.
