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Knowledge Base Article

Decide not to use Coverdell Educational Savings Account

What happens to the Coverdell Educational Savings Account if my child chooses not to go to college?

Coverdell ESA assets not used by the designated beneficiary’s 30th birthday will be distributed within 30 days as taxable income to the designated beneficiary. Or, the funds may be rolled over to an eligible family member’s Coverdell ESA.

For a complete list of eligible family members please visit our IRA Service Center.