Question: for a coverdell esa what is the maximum allowable contribution and how is treated for tax purposes?
Answer: Tax laws limit ESA contributions to $2,000 per year per child (i.e., the “designated beneficiary” of the ESA). ESA assets that are used for qualified education expenses are free from federal income taxes. ESA assets can be used for elementary and secondary education expenses, as well as postsecondary expenses.