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What is the tax treatment of Coverdell ESA distributions not used for qualified education expenses?

April 26, 2017Coverdell distributions Education ESA expenses qualified tax treatment Used

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What is the tax treatment of Coverdell ESA distributions not used for qualified education expenses?

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The earnings portion of a Coverdell ESA distribution that is not considered to be for qualified education expenses will be included in the gross income of the child and an additional 10 percent IRS tax penalty may apply.