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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 contribu- ting to a Coverdell ESA. Coverdell ESA Contributions at a Glance Don't rely on this table alone. It provides only general highlights. See the text for more complete explanations. Question Answer Are contributions deductible? No. What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. What if more than one Coverdell ESA has been opened for the same designated beneficiary? The annual contribution limit is $2,000 for each beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. What if more than one individual makes contributions for the same designated beneficiary? The annual contribution limit is $2,000 per beneficiary, no matter how many individuals contribute. Can contributions other than cash be made to a Coverdell ESA? No. When must contributions stop? No contributions can be made to a beneficiary's Coverdell ESA after he or she reaches age 18, unless the beneficiary is a special needs beneficiary. When contributions are considered made. Contribu- tions made to a Coverdell ESA for the preceding tax year are considered to have been made on the last day of the preceding year. They must be made by the due date (not including extensions) for filing your return for the preced- ing year. For example, if you make a contribution to a Coverdell ESA in February 2022, and you designate it as a contribu- tion for 2021, you are considered to have made that con- tribution on December 31, 2021. 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. Table 6-2. Limit for each designated beneficiary. For 2021, 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 Maria Luna was born in 2020, three separate Coverdell ESAs were set up for her, one by her parents, one by her grandfather, and one by her aunt. In 2021, the total of all contributions to Maria's three Cover- dell ESAs can't be more than $2,000. For example, if her grandfather contributed $2,000 to one of her Coverdell ESAs, no one else could contribute to any of her three ac- counts. Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. These contributions could be put into any of Maria's Coverdell ESA accounts. Limit for each contributor. Generally, you can contrib- ute up to $2,000 for each designated beneficiary for 2021. 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 Maria Luna's older brother, Edgar, also has a Coverdell ESA. If their grandfather contributed $2,000 to Maria's Coverdell ESA in 2021, he could also contribute $2,000 to Edgar's Coverdell ESA. Reduced limit. Your contribution limit may be re- duced. 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 benefi- ciary 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 fig- ured 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 11 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 Ameri- can 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 11 of that form. Page 42 Chapter 6 Coverdell Education Savings Account (ESA)