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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 2023, and you designate it as a contribu- tion for 2022, you are considered to have made that con- tribution on December 31, 2022. Contribution Limits There are two yearly limits. 1. One on the total amount that can be contributed for each designated beneficiary in any year. Table 6-2. 2. One on the amount that any individual can contribute for any one designated beneficiary for a year. Limit for each designated beneficiary. For 2022, 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 2021, three separate Coverdell ESAs were set up, one by the parents, one by a grandparent, and one by an aunt. In 2022, the to- tal of all contributions to the three Coverdell ESAs can't be more than $2,000. For example, if the grandparent con- tributed $2,000 to one of the Coverdell ESAs, no one else could contribute to any of the three accounts. Or, if the pa- rents contributed $1,000 and the aunt $600, the grandpar- ent or someone else could contribute no more than $400. These contributions could be put into any of the benefi- ciary's Coverdell ESA accounts. Limit for each contributor. Generally, you can contrib- ute up to $2,000 for each designated beneficiary for 2022. 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 beneficary’s Coverdell ESA in 2022, the grandparent could also contribute $2,000 to the sibling'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. Chapter 6 Coverdell Education Savings Account (ESA) Page 41