Coverdell ESA Contribution Limits: Education Tax Benefits (2025 IRS Guide)

This guide covers “Coverdell ESA Contribution Limits” within education tax benefits. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 970 (2025), Tax Benefits for Education, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

Any individual (including the designated beneficiary) can contribute to a Coverdell ESA if the individual’s MAGI (defined later under Contribution Limits) for the year is less than $110,000. For individuals filing joint returns, that amount is $220,000.

Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. There is no requirement that an organization’s income be below a certain level.

Contributions must meet all of the following requirements.

Contributions can be made to one or several Coverdell ESAs for the same designated beneficiary provided that the total contributions aren’t more than the contribution limits (defined later) for a year.

Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary.

Table 6-2 summarizes many of the features of contributing to a Coverdell ESA.

Coverdell ESA Contribution Limits

There are two yearly limits.

1. One on the total amount that can be contributed for each designated beneficiary in any year.

2. One on the amount that any individual can contribute for any one designated beneficiary for a year.

Limit for each designated beneficiary.

For 2025, the total of all contributions to all Coverdell ESAs set up for the benefit of any one designated beneficiary can’t be more than $2,000. This includes contributions (other than rollovers) to all the beneficiary’s Coverdell ESAs from all sources. Rollovers are discussed under Rollovers and Other Transfers, later.

Example.

When a beneficiary was born in 2024, three separate Coverdell ESAs were set up, one by the parents, one by a grandparent, and one by an aunt. In 2025, the total of all contributions to the three Coverdell ESAs can’t be more than $2,000. For example, if the grandparent contributed $2,000 to one of the Coverdell ESAs, no one else could contribute to any of the three accounts. Or, if the parents contributed $1,000 and the aunt $600, the grandparent or someone else could contribute no more than $400. These contributions could be put into any of the beneficiary’s Coverdell ESA accounts.

Limit for each contributor.

Generally, you can contribute up to $2,000 for each designated beneficiary for 2025. This is the most you can contribute for the benefit of any one beneficiary for the year, regardless of the number of Coverdell ESAs set up for the beneficiary.

Example.

The facts are the same as in the previous example except that the beneficiary’s older sibling also has a Coverdell ESA. If the grandparent contributed $2,000 to the beneficiary’s Coverdell ESA in 2025, the grandparent could also contribute $2,000 to the sibling’s Coverdell ESA.

Reduced limit.

Your contribution limit may be reduced. If your MAGI (defined later) is between $95,000 and $110,000 (between $190,000 and $220,000 if filing a joint return), the $2,000 limit for each designated beneficiary is gradually reduced (see Figuring the limit, later). If your MAGI is $110,000 or more ($220,000 or more if filing a joint return), you can’t contribute to anyone’s Coverdell ESA.

Modified adjusted gross income (MAGI).

For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return.

MAGI when using Form 1040 or 1040-SR.

If you file Form 1040 or 1040-SR, your MAGI is the AGI on line 11a of that form, modified by adding back any:

1. Foreign earned income exclusion,

2. Foreign housing exclusion,

3. Foreign housing deduction,

4. Exclusion of income by bona fide residents of American Samoa, and

5. Exclusion of income by bona fide residents of Puerto Rico.

If you have any of these adjustments, you can use Worksheet 6-1 to figure your MAGI for Form 1040 or 1040-SR.

MAGI when using Form 1040-NR.

If you file Form 1040-NR, your MAGI is the AGI on line 11a of that form.

Coverdell education savings account (ESA)Modified adjusted gross income (MAGI)Worksheet 6-2 Modified adjusted gross income (MAGI)Coverdell ESAWorksheet 6-1 WorksheetsCoverdell ESAMAGI, calculation of (Worksheet 6-1) Coverdell education savings account (ESA)Contribution limitsFiguring the limit (Worksheet 6-1)Worksheet 6-1. MAGI for a Coverdell ESA

Figuring the limit.

To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. The numerator (top part) is your MAGI minus $95,000 ($190,000 if filing a joint return). The denominator (bottom part) is $15,000 ($30,000 if filing a joint return). Subtract the result from $2,000. This is the amount you can contribute for each beneficiary. You can use Worksheet 6-2 to figure the limit on contributions.

WorksheetsCoverdell ESAContribution limit (Worksheet 6-2)Worksheet 6-2. Coverdell ESA Contribution Limit

Example.

A taxpayer filing as single had MAGI of $96,500 for 2025. The taxpayer can contribute up to $1,800 in 2025 for each beneficiary, as shown in the illustrated Worksheet 6-2.

Worksheet 6-2. Coverdell ESA Contribution Limit—Illustrated

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

• Publication 970 (2025), Tax Benefits for Education: Coverdell Education Savings Account (ESA) — Contributions — Contribution Limits — Internal Revenue Service; 2025 edition.

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.