A Coverdell Education Saving Account (ESA) is a tax-advantaged investment account designed to encourage savings covering future education expenses (elementary, secondary or college), such as tuition, books, uniform, etc. It is found at section 530 of the Internal Revenue Code (26 U.S.C. § 530).
The tax treatment of a Coverdell ESA is similar to 529 plans with a few differences. Like a 529 plan, a Coverdell ESA allows money to grow tax deferred and proceeds to be withdrawn tax free for qualified education expenses at a qualified institution. However, the definition of qualified expenses in an ESA includes primary and secondary school, not just college and university. The account is named for its primary supporter in the U.S. Senate, the late Senator Paul Coverdell. To view additional information on Education Savings Accounts, visit Coverdell ESA Information from IRS