Coverdell Education Savings Account (ESA) Withdrawal Rules:
The non-college withdrawal rules on the Coverdell ESA fall somewhere between the Section 529 Plan rules and the UGMA / UTMA rules. They are considered a gift to that child but can be rolled over to another child if the first doesn’t have qualifying education expenses by age 30.Better yet, you don’t have to use this account only for college costs. While you can’t use it for food or clothing like you can with a UGMA or UTMA account, you can use it for other educational costs before college. These costs can include K-12 private school tuition, tutoring, books, school uniforms, and technology (a computer or laptop).
So, if you are tight on money and have a Coverdell ESA, you’d be better off to take a withdrawal from the account for high school tuition or school uniforms, than to spend the money out of your own pocket.
