Coverdell ESA (Education Savings Account)
A flexible, tax-advantaged way to save for education expenses – K-12, as well as college, graduate school, vocational school, etc. You can contribute up to $2,000 per year for each student's schooling by establishing a Coverdell Savings Account through State Farm®.
A Closer Look
- Deposits grow tax-free until distributed
- Earnings are tax-free as long as they are used for eligible expenses – including supplies, room and board and uniforms, as well as tuition
- Can be used to pay for primary or high school expenses, as well as higher education
- Anyone can contribute up to $2,000 per child each year
Funding Options through State Farm Bank®
You can save in an FDIC-insured State Farm Bank Certificate of Deposit (CD). Contact State Farm Bank at 1-877-SF4-Bank (877-734-2265). If you are deaf, hard of hearing, or do not use your voice to communicate, you may contact us via 711 or other relay services.
Contributions are not deductible, but amounts deposited in the account grow tax-free until distributed.
All earnings in the account accumulate on a tax-deferred basis and can be withdrawn from the account tax-free if used to pay for qualified education expenses, such as tuition and fees, required books, supplies and equipment, and qualified expenses for room and board.
The American opportunity tax credit or the lifetime learning credit can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell Education Savings Account as long as the same expenses are not used for both benefits.