Income Restrictions on Coverdell ESAs

As you might expect, there is a phaseout range for contributions from $95,000 to $110,000 for singles and from $190,000 to $220,000 for joint filers. If you fall within the range, your contribution is limited. Take the amount by which your modified AGI exceeds the lower limit of the phaseout range that applies to you, and divide it by $15,000 (or by $10,000 in the case of a joint return). The result will be a decimal number that should be multiplied by $500 to determine the amount of the contribution you can't make.

Work Smart If your income is high enough to fall within the phaseout range, you can avoid losing any of the ESA contribution by having someone with lower income, such as a grandparent or family friend, make a contribution for the child.