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Starting in 2002, up to $2,000 per year in aggregate contributions to Coverdell Education Savings Account ESA may be made for the benefit of any child. The contributions to Coverdell Education Savings Account ESA may be placed in a single ESA or in multiple ESA s.

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Contributions to the Coverdell Education Savings Account ESA for the benefit of a particular child, which exceed $2,000 for a calendar year are treated as excess contributions. 

If the excess contributions to the Coverdell Education Savings Account ESA (and any earnings attributable to them) are not withdrawn from the child’s Coverdell Education Savings Account ESA (or accounts) before the tax return for the year is due, the excess contributions are subject to a 6 percent excise tax penalty for each year the excess amount remains in the account. 

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Are there any restrictions on who can contribute to a Coverdell Education Savings Account ESA?

Any individual may contribute up to $2,000 to a child’s Coverdell Education Savings Account ESA if the individual’s modified adjusted gross income (MAGI) for the taxable year is no more than $95,000 ($190,000 for married taxpayers filing jointly). 

The $2,000 maximum contribution per child is gradually reduced for individuals with MAGIs between $95,000 and $110,000 (between $190,000 and $220,000 for married taxpayers filing jointly). 

For example, an unmarried person with a MAGI of $96,500 in a taxable year could make a maximum contribution per child of $1,800 for that year. Single taxpayers with MAGI above $110,000 ($220,000 for married taxpayers filing jointly) are not eligible to make Coverdell Education Savings Account ESA contributions.