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2010 Form 1040a

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2010 Form 1040a

2010 form 1040a Index A Acontecimientos futuros, Acontecimientos futuros Administración del Seguro Social (SSA) Ayuda para radicar documentos ante la SSA , Ayuda para radicar documentos ante la SSA. 2010 form 1040a Ajustes a los Formularios 941-PR, 944(SP) o 943-PR Ajustes del período en curso, Ajustes del período en curso. 2010 form 1040a Ajustes de períodos anteriores a los Formularios 941-PR, 944(SP) o 943-PR, Ajustes de períodos anteriores Cambio en el proceso para hacer ajustes libres de intereses, Antecedentes. 2010 form 1040a Excepciones a las correcciones de las contribuciones sobre la nómina libres de intereses , Excepciones a las correcciones de las contribuciones sobre la nómina libres de intereses. 2010 form 1040a Planillas para ajustes en períodos anteriores, Planillas para ajustes en períodos anteriores. 2010 form 1040a Proceso para hacer ajustes a las contribuciones sobre la nómina, Proceso para hacer ajustes a las contribuciones sobre la nómina. 2010 form 1040a Recaudando las contribuciones retenidas de menos de los empleados, Recaudando las contribuciones retenidas de menos de los empleados. 2010 form 1040a Reintegro de cantidades incorrectamente retenidas de los empleados, Reintegro de cantidades incorrectamente retenidas de los empleados. 2010 form 1040a Ayuda contributiva, Cómo obtener ayuda relacionada con las contribuciones Ayuda provista por el IRS , Ayuda provista por el IRS. 2010 form 1040a Ayuda relacionada con las contribuciones, Ayuda relacionada con las contribuciones. 2010 form 1040a B Beneficios marginales, Retención y declaración de la contribución sobre beneficios marginales proporcionados a los empleados Cuándo se tratan los beneficios marginales como pagados al empleado, Cuándo se tratan los beneficios marginales como pagados al empleado. 2010 form 1040a Depósito de la contribución sobre los beneficios marginales, Depósito de la contribución sobre los beneficios marginales. 2010 form 1040a Regla especial en el caso de beneficios marginales proporcionados en noviembre y diciembre, Regla especial en el caso de beneficios marginales proporcionados en noviembre y diciembre. 2010 form 1040a Retención de las contribuciones al Seguro Social y al seguro Medicare sobre los beneficios marginales, Retención de las contribuciones al Seguro Social y al seguro Medicare sobre los beneficios marginales. 2010 form 1040a Valorización de vehículos proporcionados a los empleados, Valorización de vehículos proporcionados a los empleados. 2010 form 1040a C Cálculo de las contribuciones al Seguro Social, al seguro Medicare y al FUTA , 9. 2010 form 1040a Cálculo de las contribuciones al Seguro Social, al seguro Medicare y al FUTA Compensación por enfermedad, Pagos de compensación por enfermedad. 2010 form 1040a Contribución Adicional al Medicare , Retención de la Contribución Adicional al Medicare. 2010 form 1040a Contribuciones al Seguro Social y al Medicare , Contribuciones al Seguro Social y al Medicare. 2010 form 1040a Contribuciones pagadas por el patrono, Contribución pagada por el patrono correspondiente al empleado. 2010 form 1040a Deducción de la contribución, Deducción de la contribución. 2010 form 1040a Patronos domésticos y agrícolas, Patronos domésticos y agrícolas. 2010 form 1040a Calendario, Calendario Formulario 499R-2/W-2PR, Calendario Formulario 940-PR, Calendario Formulario 943-PR, Calendario Formulario 944(SP), Calendario Formulario 944-PR, Calendario Para el 28 de febrero, Calendario Para el 30 de abril, Calendario Para el 31 de enero, Calendario Para el 31 de julio, Calendario Para el 31 de marzo, Calendario Para el 31 de octubre, Calendario Clasificación errónea de empleados, Clasificación errónea de empleados. 2010 form 1040a COBRA Crédito de asistencia para las primas COBRA , Recordatorios, Crédito de asistencia para las primas de COBRA. 2010 form 1040a Comentarios y sugerencias, Recordatorios Compañías subsidarias calificadas conforme al subcapítulo S QSubs, Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). 2010 form 1040a Compensación por enfermedad, Compensación por enfermedad Patronos Compensación por enfermedad procedentes de una compañía de seguros o de algún otro tercero pagador, Patronos. 2010 form 1040a Terceros pagadores, Terceros pagadores. 2010 form 1040a Contratación de nuevos empleados, Recordatorios Contratistas independientes, Contratistas independientes. 2010 form 1040a Contribución Adicional al Medicare Retención de la Contribución Adicional al Medicare , Recordatorios Contribución Adicional al Medicare, ajustes a la retención, Ajustes a la retención de la Contribución Adicional al Medicare. 2010 form 1040a Contribución al Seguro Social y al seguro Medicare por trabajo agrícola, 7. 2010 form 1040a Contribución al Seguro Social y al seguro Medicare por trabajo agrícola El requisito de los $150 o $2,500, El requisito de los $150 o $2,500. 2010 form 1040a Excepciones al requisito de los $150 o $2,500, Excepciones. 2010 form 1040a Contribución al Seguro Social y al seguro Medicare por trabajo doméstico, 8. 2010 form 1040a Contribución al Seguro Social y al seguro Medicare por trabajo doméstico Contribución FUTA , Contribución federal para el desempleo (contribución FUTA). 2010 form 1040a Contribución sobre los ingresos de Puerto Rico, Contribuciones sobre los ingresos de Puerto Rico. 2010 form 1040a Contribuciones al Seguro Social y al Medicare para 2014, Contribuciones al Seguro Social y al Medicare para 2014. 2010 form 1040a Crédito contributivo por oportunidad de trabajo, Recordatorios D Defensor del Contribuyente, Servicio del Defensor del Contribuyente. 2010 form 1040a Depósito de las contribuciones al Seguro Social y al seguro  Medicare, requisitos de Ajustes a las contribuciones del período retroactivo , Ajustes a las contribuciones del período retroactivo. 2010 form 1040a Aplicación de los itinerarios mensuales y bisemanales, Aplicación de los itinerarios mensuales y bisemanales. 2010 form 1040a Cuándo se tienen que hacer los depósitos, Cuándo se tienen que hacer los depósitos. 2010 form 1040a Depósitos en días laborables solamente, Depósitos en días laborables solamente. 2010 form 1040a Depósitos, cuándo se hacen, 11. 2010 form 1040a Depósito de las contribuciones al Seguro Social y al seguro  Medicare Días feriados oficiales, Días feriados oficiales. 2010 form 1040a Ejemplo de itinerario bisemanal, Ejemplo de itinerario bisemanal. 2010 form 1040a Ejemplo de itinerario mensual, Ejemplo de itinerario mensual. 2010 form 1040a Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados agrícolas, Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados agrícolas. 2010 form 1040a Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados no agrícolas, Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados no agrícolas. 2010 form 1040a Fecha compensatoria para una cantidad depositada de menos, Fecha compensatoria para una cantidad depositada de menos: Formularios 941-X (PR), 944-X (PR), 944-X (SP), 943-X (PR), Ajustes a las contribuciones del período retroactivo. 2010 form 1040a Patronos de empleados agrícolas nuevos, Patronos de empleados agrícolas nuevos. 2010 form 1040a Patronos nuevos, Patronos nuevos. 2010 form 1040a Patronos que tienen empleados tanto agrícolas como no agrícolas, Patronos que tienen empleados tanto agrícolas como no agrícolas. 2010 form 1040a Período de depósito, Período de depósito. 2010 form 1040a Período de depósito de itinerario bisemanal que abarca 2 trimestres, Período de depósito de itinerario bisemanal que abarca 2 trimestres. 2010 form 1040a Período retroactivo para patronos de empleados agrícolas, Período retroactivo para patronos de empleados agrícolas. 2010 form 1040a Período retroactivo para patronos de empleados no agrícolas, Período retroactivo para patronos de empleados no agrícolas. 2010 form 1040a Regla de depositar $100,000 el próximo día, Regla de depositar $100,000 el próximo día. 2010 form 1040a Regla de depósito de itinerario mensual, Regla de depósito de itinerario mensual. 2010 form 1040a Regla de la exactitud de los depósitos, Regla de la exactitud de los depósitos. 2010 form 1040a Reglas para los depositantes de itinerario bisemanal, Reglas para los depositantes de itinerario bisemanal. 2010 form 1040a Requisito de los $2,500, Requisito de los $2,500. 2010 form 1040a Depósito electrónico Contribución federal, Recordatorios Depósitos de la contribución al Seguro Social y al seguro  Medicare, cómo se hacen, Cómo hacer los depósitos Cuando usted recibe su EIN , Cuando usted recibe su EIN. 2010 form 1040a Depósitos hechos a tiempo, Depósitos hechos a tiempo. 2010 form 1040a Opción de pago el mismo día, Opción de pago el mismo día. 2010 form 1040a Reclamación de créditos por pagos en exceso, Reclamación de créditos por pagos en exceso. 2010 form 1040a Registro de depósitos, Registro de depósitos. 2010 form 1040a Requisito de depósito electrónico, Requisito de depósito electrónico. 2010 form 1040a Dirección Cambio de dirección, Recordatorios Discrepancias entre los Formularios 941-PR or 944-PR y los Formularios 499R-2/W-2PR, Recordatorios E Elegibilidad para empleo, Elegibilidad para empleo. 2010 form 1040a Empleado Definición, 2. 2010 form 1040a ¿Quiénes son empleados? Estatutarios, Empleados estatutarios. 2010 form 1040a Según el derecho común, Definición de empleado según el derecho común. 2010 form 1040a Empleado doméstico Requisito de $1,900, Requisito de $1,900. 2010 form 1040a Empleados Clasificación errónea de empleados, Clasificación errónea de empleados. 2010 form 1040a Empleados arrendados, Empleados arrendados. 2010 form 1040a Entidades no consideradas como separadas de sus dueños, Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). 2010 form 1040a Exención, disposiciones de, Disposiciones de exención. 2010 form 1040a Especialista en servicios técnicos, Especialista en servicios técnicos. 2010 form 1040a F Formulario 499R-2/W-2PR, 13. 2010 form 1040a Los Formularios 499R-2/W-2PR y W-3PR SS-5-SP, Recordatorios, Tarjeta de Seguro Social del empleado. 2010 form 1040a SS-8PR, Ayuda provista por el IRS. 2010 form 1040a W-3PR, 13. 2010 form 1040a Los Formularios 499R-2/W-2PR y W-3PR Formulario 944-PR descontinuado, Recordatorios Fotografías de niños desaparecidos, Recordatorios FUTA Ley Federal de Contribución para el Desempleo (FUTA). 2010 form 1040a , Ley Federal de Contribución para el Desempleo (FUTA). 2010 form 1040a Reducción en el crédito contra la contribución FUTA , Estados o territorios con reducción en el crédito. 2010 form 1040a G Gastos de viaje y de representación, Gastos de viaje y de representación. 2010 form 1040a I Individuos que no son empleados estatutarios, Individuos que no son empleados estatutarios. 2010 form 1040a Agentes de bienes inmuebles autorizados, Agentes de bienes inmuebles autorizados. 2010 form 1040a Personas a quienes se les paga por acompañar y posiblemente cuidar a otras, Personas a quienes se les paga por acompañar y posiblemente cuidar a otras. 2010 form 1040a Vendedores directos, Vendedores directos. 2010 form 1040a Introducción, Introduction L Líder de cuadrilla agrícola, Líder de cuadrilla agrícola. 2010 form 1040a Los Formularios 499R-2/W-2PR y W-3PR, 13. 2010 form 1040a Los Formularios 499R-2/W-2PR y W-3PR Problemas con la radicación electrónica, Problemas con la radicación electrónica. 2010 form 1040a Radicación de Formularios 499R-2/W-2PR ante el Departamento de Hacienda, Radicación de Formularios 499R-2/W-2PR ante el Departamento de Hacienda. 2010 form 1040a Solicitud de exención de radicación de declaraciones informativas por medios electrónicos, Solicitud de exención de radicación de declaraciones informativas por medios electrónicos. 2010 form 1040a M Mantenimiento de récords, Recordatorios Matrimonio Matrimonio entre personas del mismo sexo. 2010 form 1040a , Qué hay de nuevo Medicare Retención de la Contribución Adicional al Medicare , Retención de la Contribución Adicional al Medicare. 2010 form 1040a Medios electrónicos, pago y radicación por, Recordatorios Multas relacionadas con los depósitos de la contribución al Seguro Social y al seguro  Medicare , Multas relacionadas con los depósitos. 2010 form 1040a Agentes de reportación, Agentes de reportación. 2010 form 1040a Multa por recuperación del fondo fiduciario, Multa por recuperación del fondo fiduciario. 2010 form 1040a Multa promediada por no depositar, Multa promediada por no depositar. 2010 form 1040a Orden en que se aplican los depósitos, Orden en que se aplican los depósitos. 2010 form 1040a Regla especial para los que radicaron el Formulario 944(SP) anteriormente, Regla especial para los que radicaron el Formulario 944(SP) anteriormente. 2010 form 1040a N Negocio perteneciente y administrado por cónyuges, Negocio que pertenece y es administrado por los cónyuges Excepción: Negocio en participación calificado, Excepción: Negocio en participación calificado. 2010 form 1040a Nómina Externalización de las obligaciones de la nómina, Recordatorios Outsourcing payroll duties , Recordatorios Número de identificación de contribuyente individual (ITIN), Número de identificación personal del contribuyente (ITIN) del IRS para extranjeros. 2010 form 1040a Número de identificación patronal (EIN), 3. 2010 form 1040a Número de identificación patronal (EIN) Número de identificación patronal en linea (EIN), solicitud de un, Recordatorios Número de Seguro Social Dónde se obtienen los formularios , Dónde se obtienen los formularios para solicitar un Número de Seguro Social. 2010 form 1040a Número de Seguro Social (SSN) , 4. 2010 form 1040a Número de Seguro Social (SSN), Tarjeta de Seguro Social del empleado. 2010 form 1040a Escriba correctamente el nombre y número de Seguro Social del empleado, Escriba correctamente el nombre y número de Seguro Social del empleado. 2010 form 1040a Tarjeta de Seguro Social del empleado, Tarjeta de Seguro Social del empleado. 2010 form 1040a Verificación de los números de Seguro Social, Verificación de los números de Seguro Social. 2010 form 1040a P Pago por medios electrónicos, Recordatorios Pagos con tarjeta de crédito o débito, Recordatorios Pagos que no se consideran salarios Empleado doméstico, Pagos que no se consideran salarios. 2010 form 1040a Transportación (beneficios de transporte), Transportación (beneficios de transporte). 2010 form 1040a Pagos rechazados, Recordatorios Pagos y depósitos de la contribución FUTA , 10. 2010 form 1040a Pagos y depósitos de la contribución federal para el desempleo (la contribución FUTA) Depósitos, Depósitos. 2010 form 1040a Empleados domésticos, Empleados domésticos. 2010 form 1040a Formulario 940-PR, Formulario 940-PR. 2010 form 1040a Tasa de la contribución, Tasa de la contribución FUTA. 2010 form 1040a Trabajadores agrícolas, Trabajadores agrícolas. 2010 form 1040a Parte responsable Cambio de parte responsable, Qué hay de nuevo Patrono, definición, 1. 2010 form 1040a ¿Quién es patrono? Planillas para patronos Formulario 944(SP), Formulario 944(SP). 2010 form 1040a Multas por no radicar y por no pagar, Multas o penalidades. 2010 form 1040a Patrono sucesor, Patrono sucesor. 2010 form 1040a Patrono sucesor, crédito especial, Crédito especial para un patrono sucesor. 2010 form 1040a Patronos de empleados domésticos que declaran las contribuciones al Seguro Social y al Medicare , Patronos de empleados domésticos que declaran las contribuciones al Seguro Social y al Medicare. 2010 form 1040a Patronos de trabajadores agrícolas, Patronos de trabajadores agrícolas. 2010 form 1040a Patronos que no son patronos agrícolas, Patronos que no son patronos agrícolas. 2010 form 1040a Planilla anual y pago de la contribución federal para el desempleo (contribución  FUTA), Planilla anual y pago de la contribución federal para el desempleo (contribución FUTA). 2010 form 1040a Programa de acuerdo voluntario para la clasificación de trabajadores (VCSP), Programa para el acuerdo de clasificación voluntaria de trabajadores (VCSP, por sus siglas en inglés). 2010 form 1040a Propinas, 6. 2010 form 1040a Propinas Formulario 4070-PR, 6. 2010 form 1040a Propinas Formulario 4070A-PR, 6. 2010 form 1040a Propinas Informe de propinas, Informe de propinas. 2010 form 1040a Recaudación de las contribuciones sobre las propinas, Recaudación de las contribuciones sobre las propinas. 2010 form 1040a Regla de disposición, Regla de disposición. 2010 form 1040a Q Qué hay de nuevo Contribuciones al Medicare para 2014, Qué hay de nuevo Contribuciones al Seguro Social para 2014, Qué hay de nuevo R Radicación por medios electrónicos, Recordatorios Radicar el Formulario 944(SP) en vez del Formulario 941-PR, Recordatorios Recordatorios, Recordatorios Récords, Recordatorios Reglas especiales para varias clases de servicios y de pagos, 15. 2010 form 1040a Reglas especiales para varias clases de servicios y de pagos Retención de la contribución federal sobre ingresos, 14. 2010 form 1040a Retención de la contribución federal sobre ingresos S Salarios sujetos a la contribución Compensaciones sujetos a la contribución, 5. 2010 form 1040a Salarios y otra compensación Servicio del Defensor del Contribuyente, Servicio del Defensor del Contribuyente. 2010 form 1040a Servicios de entrega privados, Recordatorios T Tarjetas de crédito o débito, pagos con, Recordatorios TAS , Servicio del Defensor del Contribuyente. 2010 form 1040a Trabajo doméstico, Trabajo doméstico. 2010 form 1040a V Veteranos calificados, contratación, Recordatorios Visa H-2A, Trabajadores agrícolas. 2010 form 1040a Remuneración pagada a trabajadores agrícolas con visa H-2A, Recordatorios Prev  Up     Home   More Online Publications
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The 2010 Form 1040a

2010 form 1040a 7. 2010 form 1040a   Coverdell Education Savings Account (ESA) Table of Contents Introduction What Is a Coverdell ESAQualified Education Expenses ContributionsContribution Limits Additional Tax on Excess Contributions Rollovers and Other TransfersRollovers Changing the Designated Beneficiary Transfer Because of Divorce DistributionsTax-Free Distributions Taxable Distributions When Assets Must Be Distributed Introduction If your modified adjusted gross income (MAGI) is less than $110,000 ($220,000 if filing a joint return), you may be able to establish a Coverdell ESA to finance the qualified education expenses of a designated beneficiary. 2010 form 1040a For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return. 2010 form 1040a There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. 2010 form 1040a However, total contributions for the beneficiary in any year cannot be more than $2,000, no matter how many accounts have been established. 2010 form 1040a See Contributions , later. 2010 form 1040a This benefit applies not only to higher education expenses, but also to elementary and secondary education expenses. 2010 form 1040a What is the tax benefit of the Coverdell ESA. 2010 form 1040a   Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. 2010 form 1040a   If, for a year, distributions from an account are not more than a designated beneficiary's qualified education expenses at an eligible educational institution, the beneficiary will not owe tax on the distributions. 2010 form 1040a See Tax-Free Distributions , later. 2010 form 1040a    Table 7-1 summarizes the main features of the Coverdell ESA. 2010 form 1040a Table 7-1. 2010 form 1040a Coverdell ESA at a Glance Do not rely on this table alone. 2010 form 1040a It provides only general highlights. 2010 form 1040a See the text for definitions of terms in bold type and for more complete explanations. 2010 form 1040a Question Answer What is a Coverdell ESA? A savings account that is set up to pay the qualified education expenses of a designated beneficiary. 2010 form 1040a Where can it be established? It can be opened in the United States at any bank or other IRS-approved entity that offers Coverdell ESAs. 2010 form 1040a Who can have a Coverdell ESA? Any beneficiary who is under age 18 or is a special needs beneficiary. 2010 form 1040a Who can contribute to a Coverdell ESA? Generally, any individual (including the beneficiary) whose modified adjusted gross income for the year is less than $110,000 ($220,000 in the case of a joint return). 2010 form 1040a Are distributions tax free? Yes, if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year. 2010 form 1040a What Is a Coverdell ESA A Coverdell ESA is a trust or custodial account created or organized in the United States only for the purpose of paying the qualified education expenses of the Designated beneficiary (defined later) of the account. 2010 form 1040a When the account is established, the designated beneficiary must be under age 18 or a special needs beneficiary. 2010 form 1040a To be treated as a Coverdell ESA, the account must be designated as a Coverdell ESA when it is created. 2010 form 1040a The document creating and governing the account must be in writing and must satisfy the following requirements. 2010 form 1040a The trustee or custodian must be a bank or an entity approved by the IRS. 2010 form 1040a The document must provide that the trustee or custodian can only accept a contribution that meets all of the following conditions. 2010 form 1040a The contribution is in cash. 2010 form 1040a The contribution is made before the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. 2010 form 1040a The contribution would not result in total contributions for the year (not including rollover contributions) being more than $2,000. 2010 form 1040a Money in the account cannot be invested in life insurance contracts. 2010 form 1040a Money in the account cannot be combined with other property except in a common trust fund or common investment fund. 2010 form 1040a The balance in the account generally must be distributed within 30 days after the earlier of the following events. 2010 form 1040a The beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. 2010 form 1040a The beneficiary's death. 2010 form 1040a Qualified Education Expenses Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. 2010 form 1040a For purposes of Coverdell ESAs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses. 2010 form 1040a Designated beneficiary. 2010 form 1040a   This is the individual named in the document creating the trust or custodial account to receive the benefit of the funds in the account. 2010 form 1040a Contributions to a qualified tuition program (QTP). 2010 form 1040a   A contribution to a QTP is a qualified education expense if the contribution is on behalf of the designated beneficiary of the Coverdell ESA. 2010 form 1040a In the case of a change in beneficiary, this is a qualified expense only if the new beneficiary is a family member of that designated beneficiary. 2010 form 1040a See chapter 8, Qualified Tuition Program . 2010 form 1040a Eligible Educational Institution For purposes of Coverdell ESAs, an eligible educational institution can be either an eligible postsecondary school or an eligible elementary or secondary school. 2010 form 1040a Eligible postsecondary school. 2010 form 1040a   This is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 2010 form 1040a S. 2010 form 1040a Department of Education. 2010 form 1040a It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2010 form 1040a The educational institution should be able to tell you if it is an eligible educational institution. 2010 form 1040a   Certain educational institutions located outside the United States also participate in the U. 2010 form 1040a S. 2010 form 1040a Department of Education's Federal Student Aid (FSA) programs. 2010 form 1040a Eligible elementary or secondary school. 2010 form 1040a   This is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. 2010 form 1040a Qualified Higher Education Expenses These are expenses related to enrollment or attendance at an eligible postsecondary school. 2010 form 1040a As shown in the following list, to be qualified, some of the expenses must be required by the school and some must be incurred by students who are enrolled at least half-time. 2010 form 1040a The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school. 2010 form 1040a Tuition and fees. 2010 form 1040a Books, supplies, and equipment. 2010 form 1040a Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible postsecondary school. 2010 form 1040a Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). 2010 form 1040a The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. 2010 form 1040a The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. 2010 form 1040a The actual amount charged if the student is residing in housing owned or operated by the school. 2010 form 1040a Half-time student. 2010 form 1040a   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. 2010 form 1040a Qualified Elementary and Secondary Education Expenses These are expenses related to enrollment or attendance at an eligible elementary or secondary school. 2010 form 1040a As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. 2010 form 1040a There are special rules for computer-related expenses. 2010 form 1040a The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school. 2010 form 1040a Tuition and fees. 2010 form 1040a Books, supplies, and equipment. 2010 form 1040a Academic tutoring. 2010 form 1040a Special needs services for a special needs beneficiary. 2010 form 1040a The following expenses must be required or provided by an eligible elementary or secondary school in connection with attendance or enrollment at the school. 2010 form 1040a Room and board. 2010 form 1040a Uniforms. 2010 form 1040a Transportation. 2010 form 1040a Supplementary items and services (including extended day programs). 2010 form 1040a The purchase of computer technology, equipment, or Internet access and related services is a qualified elementary and secondary education expense if it is to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in elementary or secondary school. 2010 form 1040a (This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. 2010 form 1040a ) Contributions Any individual (including the designated beneficiary) can contribute to a Coverdell ESA if the individual's MAGI (defined later under Contribution Limits ) for the year is less than $110,000. 2010 form 1040a For individuals filing joint returns, that amount is $220,000. 2010 form 1040a Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. 2010 form 1040a There is no requirement that an organization's income be below a certain level. 2010 form 1040a Contributions must meet all of the following requirements. 2010 form 1040a They must be in cash. 2010 form 1040a They cannot be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. 2010 form 1040a They must be made by the due date of the contributor's tax return (not including extensions). 2010 form 1040a Contributions can be made to one or several Coverdell ESAs for the same designated beneficiary provided that the total contributions are not more than the contribution limits (defined later) for a year. 2010 form 1040a Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary. 2010 form 1040a Table 7-2 summarizes many of the features of contributing to a Coverdell ESA. 2010 form 1040a When contributions considered made. 2010 form 1040a   Contributions made to a Coverdell ESA for the preceding tax year are considered to have been made on the last day of the preceding year. 2010 form 1040a They must be made by the due date (not including extensions) for filing your return for the preceding year. 2010 form 1040a   For example, if you make a contribution to a Coverdell ESA in February 2014, and you designate it as a contribution for 2013, you are considered to have made that contribution on December 31, 2013. 2010 form 1040a Contribution Limits There are two yearly limits: One on the total amount that can be contributed for each designated beneficiary in any year, and One on the amount that any individual can contribute for any one designated beneficiary for a year. 2010 form 1040a Limit for each designated beneficiary. 2010 form 1040a   For 2013, the total of all contributions to all Coverdell ESAs set up for the benefit of any one designated beneficiary cannot be more than $2,000. 2010 form 1040a This includes contributions (other than rollovers) to all the beneficiary's Coverdell ESAs from all sources. 2010 form 1040a Rollovers are discussed under Rollovers and Other Transfers , later. 2010 form 1040a Example. 2010 form 1040a When Maria Luna was born in 2012, three separate Coverdell ESAs were set up for her, one by her parents, one by her grandfather, and one by her aunt. 2010 form 1040a In 2013, the total of all contributions to Maria's three Coverdell ESAs cannot be more than $2,000. 2010 form 1040a For example, if her grandfather contributed $2,000 to one of her Coverdell ESAs, no one else could contribute to any of her three accounts. 2010 form 1040a Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. 2010 form 1040a These contributions could be put into any of Maria's Coverdell ESA accounts. 2010 form 1040a Limit for each contributor. 2010 form 1040a   Generally, you can contribute up to $2,000 for each designated beneficiary for 2013. 2010 form 1040a This is the most you can contribute for the benefit of any one beneficiary for the year, regardless of the number of Coverdell ESAs set up for the beneficiary. 2010 form 1040a Example. 2010 form 1040a The facts are the same as in the previous example except that Maria Luna's older brother, Edgar, also has a Coverdell ESA. 2010 form 1040a If their grandfather contributed $2,000 to Maria's Coverdell ESA in 2013, he could also contribute $2,000 to Edgar's Coverdell ESA. 2010 form 1040a Reduced limit. 2010 form 1040a   Your contribution limit may be reduced. 2010 form 1040a If your MAGI (defined on this page) is between $95,000 and $110,000 (between $190,000 and $220,000 if filing a joint return), the $2,000 limit for each designated beneficiary is gradually reduced (see Figuring the limit , later). 2010 form 1040a If your MAGI is $110,000 or more ($220,000 or more if filing a joint return), you cannot contribute to anyone's Coverdell ESA. 2010 form 1040a Table 7-2. 2010 form 1040a Coverdell ESA Contributions at a Glance Do not rely on this table alone. 2010 form 1040a It provides only general highlights. 2010 form 1040a See the text for more complete explanations. 2010 form 1040a Question Answer Are contributions deductible? No. 2010 form 1040a What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. 2010 form 1040a What if more than one Coverdell ESA has been opened for the same designated beneficiary? The annual contribution limit is $2,000 for each beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. 2010 form 1040a What if more than one individual makes contributions for the same designated beneficiary? The annual contribution limit is $2,000 per beneficiary, no matter how many individuals contribute. 2010 form 1040a Can contributions other than cash be made to a Coverdell ESA? No. 2010 form 1040a When must contributions stop? No contributions can be made to a beneficiary's Coverdell ESA after he or she reaches age 18, unless the beneficiary is a special needs beneficiary. 2010 form 1040a Modified adjusted gross income (MAGI). 2010 form 1040a   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. 2010 form 1040a MAGI when using Form 1040A. 2010 form 1040a   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. 2010 form 1040a MAGI when using Form 1040. 2010 form 1040a   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. 2010 form 1040a MAGI when using Form 1040NR. 2010 form 1040a   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form. 2010 form 1040a MAGI when using Form 1040NR-EZ. 2010 form 1040a   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form. 2010 form 1040a   If you have any of these adjustments, you can use Worksheet 7-1. 2010 form 1040a MAGI for a Coverdell ESA , later, to figure your MAGI for Form 1040. 2010 form 1040a Worksheet 7-1. 2010 form 1040a MAGI for a Coverdell ESA 1. 2010 form 1040a Enter your adjusted gross income  (Form 1040, line 38)   1. 2010 form 1040a   2. 2010 form 1040a Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. 2010 form 1040a       3. 2010 form 1040a Enter your foreign housing deduction (Form 2555, line 50)   3. 2010 form 1040a         4. 2010 form 1040a Enter the amount of income from Puerto Rico you are excluding   4. 2010 form 1040a       5. 2010 form 1040a Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. 2010 form 1040a       6. 2010 form 1040a Add lines 2, 3, 4, and 5   6. 2010 form 1040a   7. 2010 form 1040a Add lines 1 and 6. 2010 form 1040a This is your  modified adjusted gross income   7. 2010 form 1040a   Figuring the limit. 2010 form 1040a    To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. 2010 form 1040a The numerator (top number) is your MAGI minus $95,000 ($190,000 if filing a joint return). 2010 form 1040a The denominator (bottom number) is $15,000 ($30,000 if filing a joint return). 2010 form 1040a Subtract the result from $2,000. 2010 form 1040a This is the amount you can contribute for each beneficiary. 2010 form 1040a You can use Worksheet 7-2. 2010 form 1040a Coverdell ESA Contribution Limit to figure the limit on contributions. 2010 form 1040a    Worksheet 7-2. 2010 form 1040a Coverdell ESA Contribution Limit 1. 2010 form 1040a Maximum contribution   1. 2010 form 1040a $2,000 2. 2010 form 1040a Enter your modified adjusted gross income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. 2010 form 1040a   3. 2010 form 1040a Enter $190,000 if married filing jointly; $95,000 for all other filers   3. 2010 form 1040a   4. 2010 form 1040a Subtract line 3 from line 2. 2010 form 1040a If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. 2010 form 1040a   5. 2010 form 1040a Enter $30,000 if married filing jointly; $15,000 for all other filers   5. 2010 form 1040a     Note. 2010 form 1040a If the amount on line 4 is greater than or equal to the amount on line 5, stop here. 2010 form 1040a You are not allowed to contribute to a Coverdell ESA for 2013. 2010 form 1040a       6. 2010 form 1040a Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. 2010 form 1040a . 2010 form 1040a 7. 2010 form 1040a Multiply line 1 by line 6   7. 2010 form 1040a   8. 2010 form 1040a Subtract line 7 from line 1   8. 2010 form 1040a   Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. 2010 form 1040a Example. 2010 form 1040a Paul, who is single, had a MAGI of $96,500 for 2013. 2010 form 1040a Paul can contribute up to $1,800 in 2013 for each beneficiary, as shown in the illustrated Worksheet 7-2, Coverdell ESA Contribution Limit–Illustrated. 2010 form 1040a Worksheet 7-2. 2010 form 1040a Coverdell ESA Contribution Limit—Illustrated 1. 2010 form 1040a Maximum contribution   1. 2010 form 1040a $2,000 2. 2010 form 1040a Enter your modified adjusted gross  income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. 2010 form 1040a 96,500 3. 2010 form 1040a Enter $190,000 if married filing jointly; $95,000 for all other filers   3. 2010 form 1040a 95,000 4. 2010 form 1040a Subtract line 3 from line 2. 2010 form 1040a If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. 2010 form 1040a 1,500 5. 2010 form 1040a Enter $30,000 if married filing jointly; $15,000 for all other filers   5. 2010 form 1040a 15,000   Note. 2010 form 1040a If the amount on line 4 is greater than or equal to the amount on line 5,  stop here. 2010 form 1040a You are not allowed to  contribute to a Coverdell ESA for 2013. 2010 form 1040a       6. 2010 form 1040a Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. 2010 form 1040a . 2010 form 1040a 100 7. 2010 form 1040a Multiply line 1 by line 6   7. 2010 form 1040a 200 8. 2010 form 1040a Subtract line 7 from line 1   8. 2010 form 1040a 1,800 Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. 2010 form 1040a Additional Tax on Excess Contributions The beneficiary must pay a 6% excise tax each year on excess contributions that are in a Coverdell ESA at the end of the year. 2010 form 1040a Excess contributions are the total of the following two amounts. 2010 form 1040a Contributions to any designated beneficiary's Coverdell ESA for the year that are more than $2,000 (or, if less, the total of each contributor's limit for the year, as discussed earlier). 2010 form 1040a Excess contributions for the preceding year, reduced by the total of the following two amounts: Distributions (other than those rolled over as discussed later) during the year, and The contribution limit for the current year minus the amount contributed for the current year. 2010 form 1040a Exceptions. 2010 form 1040a   The excise tax does not apply if excess contributions made during 2013 (and any earnings on them) are distributed before the first day of the sixth month of the following tax year (June 1, 2014, for a calendar year taxpayer). 2010 form 1040a   However, you must include the distributed earnings in gross income for the year in which the excess contribution was made. 2010 form 1040a You should receive Form 1099-Q, Payments From Qualified Education Programs, from each institution from which excess contributions were distributed. 2010 form 1040a Box 2 of that form will show the amount of earnings on your excess contributions. 2010 form 1040a Code “2” or “3” entered in the blank box below boxes 5 and 6 indicate the year in which the earnings are taxable. 2010 form 1040a See Instructions for Recipient on the back of copy B of your Form 1099-Q. 2010 form 1040a Enter the amount of earnings on line 21 of Form 1040 (or Form 1040NR) for the applicable tax year. 2010 form 1040a For more information, see Taxable Distributions , later. 2010 form 1040a   The excise tax does not apply to any rollover contribution. 2010 form 1040a Note. 2010 form 1040a Contributions made in one year for the preceding tax year are considered to have been made on the last day of the preceding year. 2010 form 1040a Example. 2010 form 1040a In 2012, Greta's parents and grandparents contributed a total of $2,300 to Greta's Coverdell ESA— an excess contribution of $300. 2010 form 1040a Because Greta did not withdraw the excess before June 1, 2013, she had to pay an additional tax of $18 (6% × $300) when she filed her 2012 tax return. 2010 form 1040a In 2013, excess contributions of $500 were made to Greta's account, however, she withdrew $250 from that account to use for qualified education expenses. 2010 form 1040a Using the steps shown earlier under Additional Tax on Excess Contributions , Greta figures the excess contribution in her account at the end of 2013 as follows. 2010 form 1040a (1)   $500 excess contributions made in 2013     + (2)   $300 excess contributions in ESA at end of 2012     − (2a)   $250 distribution during 2013         $550 excess at end of 2013   × 6%=$33           If Greta limits 2014 contributions to $1,450 ($2,000 maximum allowed − $550 excess contributions from 2013), she will not owe any additional tax in 2014 for excess contributions. 2010 form 1040a Figuring and reporting the additional tax. 2010 form 1040a   You figure this excise tax in Part V of Form 5329. 2010 form 1040a Report the additional tax on Form 1040, line 58 (or Form 1040NR, line 56). 2010 form 1040a Rollovers and Other Transfers Assets can be rolled over from one Coverdell ESA to another or the designated beneficiary can be changed. 2010 form 1040a The beneficiary's interest can be transferred to a spouse or former spouse because of divorce. 2010 form 1040a Rollovers Any amount distributed from a Coverdell ESA is not taxable if it is rolled over to another Coverdell ESA for the benefit of the same beneficiary or a member of the beneficiary's family (including the beneficiary's spouse) who is under age 30. 2010 form 1040a This age limitation does not apply if the new beneficiary is a special needs beneficiary. 2010 form 1040a An amount is rolled over if it is paid to another Coverdell ESA within 60 days after the date of the distribution. 2010 form 1040a Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. 2010 form 1040a These are not taxable distributions. 2010 form 1040a Members of the beneficiary's family. 2010 form 1040a   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. 2010 form 1040a Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. 2010 form 1040a Brother, sister, stepbrother, or stepsister. 2010 form 1040a Father or mother or ancestor of either. 2010 form 1040a Stepfather or stepmother. 2010 form 1040a Son or daughter of a brother or sister. 2010 form 1040a Brother or sister of father or mother. 2010 form 1040a Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. 2010 form 1040a The spouse of any individual listed above. 2010 form 1040a First cousin. 2010 form 1040a Example. 2010 form 1040a When Aaron graduated from college last year he had $5,000 left in his Coverdell ESA. 2010 form 1040a He wanted to give this money to his younger sister, who was still in high school. 2010 form 1040a In order to avoid paying tax on the distribution of the amount remaining in his account, Aaron contributed the same amount to his sister's Coverdell ESA within 60 days of the distribution. 2010 form 1040a Only one rollover per Coverdell ESA is allowed during the 12-month period ending on the date of the payment or distribution. 2010 form 1040a This rule does not apply to the rollover of a military death gratuity or payment from Servicemembers' Group Life Insurance (SGLI). 2010 form 1040a Military death gratuity. 2010 form 1040a   If you received a military death gratuity or a payment from Servicemembers' Group Life Insurance (SGLI), you may roll over all or part of the amount received to one or more Coverdell ESAs for the benefit of members of the beneficiary's family (see Members of the beneficiary's family , earlier). 2010 form 1040a Such payments are made to an eligible survivor upon the death of a member of the armed forces. 2010 form 1040a The contribution to a Coverdell ESA from survivor benefits received cannot be made later than 1 year after the date on which you receive the gratuity or SGLI payment. 2010 form 1040a   This rollover contribution is not subject to (but is in addition to) the contribution limits discussed earlier under Contribution Limits . 2010 form 1040a The amount you roll over cannot exceed the total survivor benefits you received, reduced by contributions from these benefits to a Roth IRA or other Coverdell ESAs. 2010 form 1040a   The amount contributed from the survivor benefits is treated as part of your basis (cost) in the Coverdell ESA, and will not be taxed when distributed. 2010 form 1040a See Distributions , later. 2010 form 1040a The limit of one rollover per Coverdell ESA during a 12-month period does not apply to a military death gratuity or SGLI payment. 2010 form 1040a Changing the Designated Beneficiary The designated beneficiary can be changed. 2010 form 1040a See Members of the beneficiary's family , earlier. 2010 form 1040a There are no tax consequences if, at the time of the change, the new beneficiary is under age 30 or is a special needs beneficiary. 2010 form 1040a Example. 2010 form 1040a Assume the same situation for Aaron as in the last example (see Rollovers , earlier). 2010 form 1040a Instead of closing his Coverdell ESA and paying the distribution into his sister's Coverdell ESA, Aaron could have instructed the trustee of his account to simply change the name of the beneficiary on his account to that of his sister. 2010 form 1040a Transfer Because of Divorce If a spouse or former spouse receives a Coverdell ESA under a divorce or separation instrument, it is not a taxable transfer. 2010 form 1040a After the transfer, the spouse or former spouse treats the Coverdell ESA as his or her own. 2010 form 1040a Example. 2010 form 1040a In their divorce settlement, Peg received her ex-husband's Coverdell ESA. 2010 form 1040a In this process, the account was transferred into her name. 2010 form 1040a Peg now treats the funds in this Coverdell ESA as if she were the original owner. 2010 form 1040a Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. 2010 form 1040a Whether the distributions are tax free depends, in part, on whether the distributions are equal to or less than the amount of Adjusted qualified education expenses (defined later) that the beneficiary has in the same tax year. 2010 form 1040a See Table 7-3, Coverdell ESA Distributions at a Glance, for highlights. 2010 form 1040a Table 7-3. 2010 form 1040a Coverdell ESA Distributions at a Glance Do not rely on this table alone. 2010 form 1040a It provides only general highlights. 2010 form 1040a See the text for definitions of terms in bold type and for more complete explanations. 2010 form 1040a Question Answer Is a distribution from a Coverdell ESA to pay for a designated beneficiary's qualified education expenses tax free? Generally, yes, to the extent the amount of the distribution is not more than the designated beneficiary's adjusted qualified education expenses. 2010 form 1040a After the designated beneficiary completes his or her education at an eligible educational institution, can amounts remaining in the Coverdell ESA be distributed? Yes. 2010 form 1040a Amounts must be distributed when the designated beneficiary reaches age 30, unless he or she is a special needs beneficiary. 2010 form 1040a Also, certain transfers to members of the beneficiary's family are permitted. 2010 form 1040a Does the designated beneficiary need to be enrolled for a minimum number of courses to take a tax-free distribution? No. 2010 form 1040a Adjusted qualified education expenses. 2010 form 1040a   To determine if total distributions for the year are more than the amount of qualified education expenses, reduce total qualified education expenses by any tax-free educational assistance. 2010 form 1040a Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2010 form 1040a The amount you get by subtracting tax-free educational assistance from your total qualified education expenses is your adjusted qualified education expenses. 2010 form 1040a Tax-Free Distributions Generally, distributions are tax free if they are not more than the beneficiary's adjusted qualified education expenses for the year. 2010 form 1040a Do not report tax-free distributions (including qualifying rollovers) on your tax return. 2010 form 1040a Taxable Distributions A portion of the distributions is generally taxable to the beneficiary if the total distributions are more than the beneficiary's adjusted qualified education expenses for the year. 2010 form 1040a Excess distribution. 2010 form 1040a   This is the part of the total distribution that is more than the beneficiary's adjusted qualified education expenses for the year. 2010 form 1040a Earnings and basis. 2010 form 1040a   You will receive a Form 1099-Q for each of the Coverdell ESAs from which money was distributed in 2013. 2010 form 1040a The amount of your gross distribution will be shown in box 1. 2010 form 1040a For 2013, instead of dividing the gross distribution between your earnings (box 2) and your basis (already-taxed amount) (box 3), the payer or trustee may report the fair market value (account balance) of the Coverdell ESA as of December 31, 2013. 2010 form 1040a This will be shown in the blank box below boxes 5 and 6. 2010 form 1040a   The amount contributed from survivor benefits (see Military death gratuity , earlier) is treated as part of your basis and will not be taxed when distributed. 2010 form 1040a Figuring the Taxable Portion of a Distribution The taxable portion is the amount of the excess distribution that represents earnings that have accumulated tax free in the account. 2010 form 1040a Figure the taxable portion for 2013 as shown in the following steps. 2010 form 1040a Multiply the total amount distributed by a fraction. 2010 form 1040a The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the value (balance) of the account at the end of 2013 plus the amount distributed during 2013. 2010 form 1040a Subtract the amount figured in (1) from the total amount distributed during 2013. 2010 form 1040a The result is the amount of earnings included in the distribution(s). 2010 form 1040a Multiply the amount of earnings figured in (2) by a fraction. 2010 form 1040a The numerator is the adjusted qualified education expenses paid during 2013 and the denominator is the total amount distributed during 2013. 2010 form 1040a Subtract the amount figured in (3) from the amount figured in (2). 2010 form 1040a The result is the amount the beneficiary must include in income. 2010 form 1040a The taxable amount must be reported on Form 1040 or Form 1040NR, line 21. 2010 form 1040a Example. 2010 form 1040a You received an $850 distribution from your Coverdell ESA, to which $1,500 had been contributed before 2013. 2010 form 1040a There were no contributions in 2013. 2010 form 1040a This is your first distribution from the account, so your basis in the account on December 31, 2012, was $1,500. 2010 form 1040a The value (balance) of your account on December 31, 2013, was $950. 2010 form 1040a You had $700 of adjusted qualified education expenses (AQEE) for the year. 2010 form 1040a Using the steps in Figuring the Taxable Portion of a Distribution , earlier, figure the taxable portion of your distribution as follows. 2010 form 1040a   1. 2010 form 1040a $850 (distribution) × $1,500 basis + $0 contributions  $950 value + $850 distribution       =$708 (basis portion of distribution)     2. 2010 form 1040a $850 (distribution)−$708 (basis portion of distribution)     =$142 (earnings included in distribution)   3. 2010 form 1040a $142 (earnings) × $700 AQEE  $850 distribution           =$117 (tax-free earnings)     4. 2010 form 1040a $142 (earnings)−$117 (tax-free earnings)=$25 (taxable earnings)                 You must include $25 in income as distributed earnings not used for qualified education expenses. 2010 form 1040a Report this amount on Form 1040, line 21, listing the type and amount of income on the dotted line. 2010 form 1040a Worksheet 7-3, Coverdell ESA–Taxable Distributions and Basis , at the end of this chapter, can help you figure your adjusted qualified education expenses, how much of your distribution must be included in income, and the remaining basis in your Coverdell ESA(s). 2010 form 1040a Coordination With American Opportunity and Lifetime Learning Credits The American opportunity or lifetime learning credit can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits. 2010 form 1040a This means the beneficiary must reduce qualified higher education expenses by tax-free educational assistance, and then further reduce them by any expenses taken into account in determining an American opportunity or lifetime learning credit. 2010 form 1040a Example. 2010 form 1040a Derek Green had $5,800 of qualified higher education expenses for 2013, his first year in college. 2010 form 1040a He paid his college expenses from the following sources. 2010 form 1040a     Partial tuition scholarship (tax free) $1,500     Coverdell ESA distribution 1,000     Gift from parents 2,100     Earnings from part-time job 1,200           Of his $5,800 of qualified higher education expenses, $4,000 was tuition and related expenses that also qualified for an American opportunity credit. 2010 form 1040a Derek's parents claimed a $2,500 American opportunity credit (based on $4,000 expenses) on their tax return. 2010 form 1040a Before Derek can determine the taxable portion of his Coverdell ESA distribution, he must reduce his total qualified higher education expenses. 2010 form 1040a     Total qualified higher education expenses $5,800     Minus: Tax-free educational assistance −1,500     Minus: Expenses taken into account in  figuring American opportunity credit − 4,000     Equals: Adjusted qualified higher education  expenses (AQHEE) $ 300           Since the adjusted qualified higher education expenses ($300) are less than the Coverdell ESA distribution ($1,000), part of the distribution will be taxable. 2010 form 1040a The balance in Derek's account was $1,800 on December 31, 2013. 2010 form 1040a Prior to 2013, $2,100 had been contributed to this account. 2010 form 1040a Contributions for 2013 totaled $400. 2010 form 1040a Using the four steps outlined earlier, Derek figures the taxable portion of his distribution as shown below. 2010 form 1040a   1. 2010 form 1040a $1,000 (distribution) × $2,100 basis + $400 contributions  $1,800 value + $1,000 distribution           =$893 (basis portion of distribution)     2. 2010 form 1040a $1,000 (distribution)−$893 (basis portion of distribution)     = $107 (earnings included in distribution)   3. 2010 form 1040a $107 (earnings) × $300 AQHEE  $1,000 distribution       =$32 (tax-free earnings)     4. 2010 form 1040a $107 (earnings)−$32 (tax-free earnings)=$75 (taxable earnings)                 Derek must include $75 in income (Form 1040, line 21). 2010 form 1040a This is the amount of distributed earnings not used for adjusted qualified higher education expenses. 2010 form 1040a Coordination With Qualified Tuition Program (QTP) Distributions If a designated beneficiary receives distributions from both a Coverdell ESA and a QTP in the same year, and the total distribution is more than the beneficiary's adjusted qualified higher education expenses, those expenses must be allocated between the distribution from the Coverdell ESA and the distribution from the QTP before figuring how much of each distribution is taxable. 2010 form 1040a The following two examples illustrate possible allocations. 2010 form 1040a Example 1. 2010 form 1040a In 2013, Beatrice graduated from high school and began her first semester of college. 2010 form 1040a That year, she had $1,000 of qualified elementary and secondary education expenses (QESEE) for high school and $3,000 of qualified higher education expenses (QHEE) for college. 2010 form 1040a To pay these expenses, Beatrice withdrew $800 from her Coverdell ESA and $4,200 from her QTP. 2010 form 1040a No one claimed Beatrice as a dependent, nor was she eligible for an education credit. 2010 form 1040a She did not receive any tax-free educational assistance in 2013. 2010 form 1040a Beatrice must allocate her total qualified education expenses between the two distributions. 2010 form 1040a Beatrice knows that tax-free treatment will be available if she applies her $800 Coverdell ESA distribution toward her $1,000 of qualified education expenses for high school. 2010 form 1040a The qualified expenses are greater than the distribution, making the $800 Coverdell ESA distribution tax free. 2010 form 1040a Next, Beatrice matches her $4,200 QTP distribution to her $3,000 of QHEE, and finds she has an excess QTP distribution of $1,200 ($4,200 QTP − $3,000 QHEE). 2010 form 1040a She cannot use the extra $200 of high school expenses (from (1) above) against the QTP distribution because those expenses do not qualify a QTP for tax-free treatment. 2010 form 1040a Finally, Beatrice figures the taxable and tax-free portions of her QTP distribution based on her $3,000 of QHEE. 2010 form 1040a (See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program for more information. 2010 form 1040a ) Example 2. 2010 form 1040a Assume the same facts as in Example 1 , except that Beatrice withdrew $1,800 from her Coverdell ESA and $3,200 from her QTP. 2010 form 1040a In this case, she allocates her qualified education expenses as follows. 2010 form 1040a Using the same reasoning as in Example 1, Beatrice matches $1,000 of her Coverdell ESA distribution to her $1,000 of QESEE—she has $800 of her distribution remaining. 2010 form 1040a Because higher education expenses can also qualify a Coverdell ESA distribution for tax-free treatment, Beatrice allocates her $3,000 of QHEE between the remaining $800 Coverdell ESA and the $3,200 QTP distributions ($4,000 total). 2010 form 1040a   $3,000 QHEE × $800 ESA distribution  $4,000 total distribution = $600 QHEE (ESA)     $3,000 QHEE × $3,200 QTP distribution  $4,000 total distribution = $2,400 QHEE (QTP)   Beatrice then figures the taxable part of her: Coverdell ESA distribution based on qualified education expenses of $1,600 ($1,000 QESEE + $600 QHEE). 2010 form 1040a See Figuring the Taxable Portion of a Distribution , earlier, in this chapter. 2010 form 1040a   QTP distribution based on her $2,400 of QHEE (see Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program). 2010 form 1040a The above examples show two types of allocation between distributions from a Coverdell ESA and a QTP. 2010 form 1040a However, you do not have to allocate your expenses in the same way. 2010 form 1040a You can use any reasonable method. 2010 form 1040a Losses on Coverdell ESA Investments If you have a loss on your investment in a Coverdell ESA, you may be able to deduct the loss on your income tax return. 2010 form 1040a You can deduct the loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. 2010 form 1040a Your basis is the total amount of contributions to that Coverdell ESA. 2010 form 1040a You claim the loss as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23 (Schedule A (Form 1040NR), line 9), subject to the 2%-of-adjusted-gross-income limit. 2010 form 1040a If you have distributions from more than one Coverdell ESA account during a year, you must combine the information (amount of distribution, basis, etc. 2010 form 1040a ) from all such accounts in order to determine your taxable earnings for the year. 2010 form 1040a By doing this, the loss from one ESA account reduces the distributed earnings (if any) from any other ESA account. 2010 form 1040a For examples of the calculation, see Losses on QTP Investments in chapter 8, Qualified Tuition Program. 2010 form 1040a Additional Tax on Taxable Distributions Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income. 2010 form 1040a Exceptions. 2010 form 1040a   The 10% additional tax does not apply to distributions: Paid to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary. 2010 form 1040a Made because the designated beneficiary is disabled. 2010 form 1040a A person is considered to be disabled if he or she shows proof that he or she cannot do any substantial gainful activity because of his or her physical or mental condition. 2010 form 1040a A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration. 2010 form 1040a Included in income because the designated beneficiary received: A tax-free scholarship or fellowship (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), or Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2010 form 1040a Made on account of the attendance of the designated beneficiary at a U. 2010 form 1040a S. 2010 form 1040a military academy (such as the USMA at West Point). 2010 form 1040a This exception applies only to the extent that the amount of the distribution does not exceed the costs of advanced education (as defined in section 2005(d)(3) of title 10 of the U. 2010 form 1040a S. 2010 form 1040a Code) attributable to such attendance. 2010 form 1040a Included in income only because the qualified education expenses were taken into account in determining the American opportunity or lifetime learning credit (see Coordination With American Opportunity and Lifetime Learning Credits , earlier). 2010 form 1040a Made before June 1, 2014, of an excess 2013 contribution (and any earnings on it). 2010 form 1040a The distributed earnings must be included in gross income for the year in which the excess contribution was made. 2010 form 1040a Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. 2010 form 1040a Figuring the additional tax. 2010 form 1040a    Use Part II of Form 5329, to figure any additional tax. 2010 form 1040a Report the amount on Form 1040, line 58, or Form 1040NR, line 56. 2010 form 1040a When Assets Must Be Distributed Any assets remaining in a Coverdell ESA must be distributed when either one of the following two events occurs. 2010 form 1040a The designated beneficiary reaches age 30. 2010 form 1040a In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. 2010 form 1040a However, this rule does not apply if the beneficiary is a special needs beneficiary. 2010 form 1040a The designated beneficiary dies before reaching age 30. 2010 form 1040a In this case, the remaining assets must generally be distributed within 30 days after the date of death. 2010 form 1040a Exception for Transfer to Surviving Spouse or Family Member If a Coverdell ESA is transferred to a surviving spouse or other family member as the result of the death of the designated beneficiary, the Coverdell ESA retains its status. 2010 form 1040a (“Family member” was defined earlier under Rollovers . 2010 form 1040a ) This means the spouse or other family member can treat the Coverdell ESA as his or her own and does not need to withdraw the assets until he or she reaches age 30. 2010 form 1040a This age limitation does not apply if the new beneficiary is a special needs beneficiary. 2010 form 1040a There are no tax consequences as a result of the transfer. 2010 form 1040a How To Figure the Taxable Earnings When a total distribution is made because the designated beneficiary either reached age 30 or died, the earnings that accumulated tax free in the account must be included in taxable income. 2010 form 1040a You determine these earnings as shown in the following two steps. 2010 form 1040a Multiply the amount distributed by a fraction. 2010 form 1040a The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the balance in the account at the end of 2013 plus the amount distributed during 2013. 2010 form 1040a Subtract the amount figured in (1) from the total amount distributed during 2013. 2010 form 1040a The result is the amount of earnings included in the distribution. 2010 form 1040a For an example, see steps (1) and (2) of the Example under Figuring the Taxable Portion of a Distribution, earlier. 2010 form 1040a The beneficiary or other person receiving the distribution must report this amount on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line. 2010 form 1040a Worksheet 7-3 Instructions. 2010 form 1040a Coverdell ESA—Taxable Distributions and Basis Line G. 2010 form 1040a Enter the total distributions received from all Coverdell ESAs during 2013. 2010 form 1040a Do not include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). 2010 form 1040a Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year for which the contributions were made. 2010 form 1040a Line 2. 2010 form 1040a Your basis (amount already taxed) in this Coverdell ESA as of December 31, 2012, is the total of:   •All contributions to this Coverdell ESA before 2013 •Minus the tax-free portion of any distributions from this Coverdell ESA before 2013. 2010 form 1040a   If your last distribution from this Coverdell ESA was before 2013, you must start with the basis in your account as of the end of the last year in which you took a distribution. 2010 form 1040a For years before 2002, you can find that amount on the last line of the worksheet in the Instructions for Form 8606, Nondeductible IRAs, that you completed for that year. 2010 form 1040a For years after 2001, you can find that amount by using the ending basis from the worksheet in Publication 970 for that year. 2010 form 1040a You can determine your basis in this Coverdell ESA as of December 31, 2012, by adding to the basis as of the end of that year any contributions made to that account after the year of the distribution and before 2013. 2010 form 1040a Line 4. 2010 form 1040a Enter the total distributions received from this Coverdell ESA in 2013. 2010 form 1040a Do not include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). 2010 form 1040a   Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year of the contributions. 2010 form 1040a Line 7. 2010 form 1040a Enter the total value of this Coverdell ESA as of December 31, 2013, plus any outstanding rollovers contributed to the account after 2012, but before the end of the 60-day rollover period. 2010 form 1040a A statement should be sent to you by January 31, 2014, for this Coverdell ESA showing the value on December 31, 2013. 2010 form 1040a   A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. 2010 form 1040a An outstanding rollover is any amount withdrawn within 60 days before the end of 2013 (November 2 through December 31) that was rolled over after December 31, 2013, but within the 60-day rollover period. 2010 form 1040a Worksheet 7-3. 2010 form 1040a Coverdell ESA—Taxable Distributions and Basis How to complete this worksheet. 2010 form 1040a • • • Complete Part I, lines A through H, on only one worksheet. 2010 form 1040a  Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. 2010 form 1040a  Complete Part III, the Summary (line 16), on only one worksheet. 2010 form 1040a Part I. 2010 form 1040a Qualified Education Expenses (Complete for total expenses)       A. 2010 form 1040a Enter your total qualified education expenses for 2013   A. 2010 form 1040a   B. 2010 form 1040a Enter those qualified education expenses paid for with tax-free educational assistance (for example, tax-free scholarships, veterans' educational benefits, Pell grants, employer-provided educational assistance)   B. 2010 form 1040a         C. 2010 form 1040a Enter those qualified higher education expenses deducted on Schedule C or C-EZ (Form 1040). 2010 form 1040a Schedule F (Form 1040), or as a miscellaneous itemized deduction on Schedule A (Form 1040 or 1040NR)   C. 2010 form 1040a         D. 2010 form 1040a Enter those qualified higher education expenses on which  an American opportunity or lifetime learning credit was based   D. 2010 form 1040a         E. 2010 form 1040a Add lines B, C, and D   D. 2010 form 1040a   F. 2010 form 1040a Subtract line E from line A. 2010 form 1040a This is your adjusted qualified education expense for 2013   E. 2010 form 1040a   G. 2010 form 1040a Enter your total distributions from all Coverdell ESAs during 2013. 2010 form 1040a Do not include rollovers  or the return of excess contributions (see instructions)   F. 2010 form 1040a   H. 2010 form 1040a Divide line F by line G. 2010 form 1040a Enter the result as a decimal (rounded to at least 3 places). 2010 form 1040a If the  result is 1. 2010 form 1040a 000 or more, enter 1. 2010 form 1040a 000   G. 2010 form 1040a . 2010 form 1040a Part II. 2010 form 1040a Taxable Distributions and Basis (Complete separately for each account) 1. 2010 form 1040a Enter the amount contributed to this Coverdell ESA for 2013, including contributions made for 2013 from January 1, 2014, through April 15, 2014. 2010 form 1040a Do not include rollovers or the return of excess contributions   1. 2010 form 1040a   2. 2010 form 1040a Enter your basis in this Coverdell ESA as of December 31, 2012 (see instructions)   2. 2010 form 1040a   3. 2010 form 1040a Add lines 1 and 2   3. 2010 form 1040a   4. 2010 form 1040a Enter the total distributions from this Coverdell ESA during 2013. 2010 form 1040a Do not include rollovers  or the return of excess contributions (see instructions)   4. 2010 form 1040a   5. 2010 form 1040a Multiply line 4 by line H. 2010 form 1040a This is the amount of adjusted qualified  education expense attributable to this Coverdell ESA   5. 2010 form 1040a         6. 2010 form 1040a Subtract line 5 from line 4   6. 2010 form 1040a         7. 2010 form 1040a Enter the total value of this Coverdell ESA as of December 31, 2013,  plus any outstanding rollovers (see instructions)   7. 2010 form 1040a         8. 2010 form 1040a Add lines 4 and 7   8. 2010 form 1040a         9. 2010 form 1040a Divide line 3 by line 8. 2010 form 1040a Enter the result as a decimal (rounded to  at least 3 places). 2010 form 1040a If the result is 1. 2010 form 1040a 000 or more, enter 1. 2010 form 1040a 000   9. 2010 form 1040a . 2010 form 1040a       10. 2010 form 1040a Multiply line 4 by line 9. 2010 form 1040a This is the amount of basis allocated to your  distributions, and is tax free   10. 2010 form 1040a     Note. 2010 form 1040a If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. 2010 form 1040a       11. 2010 form 1040a Subtract line 10 from line 4   11. 2010 form 1040a   12. 2010 form 1040a Divide line 5 by line 4. 2010 form 1040a Enter the result as a decimal (rounded to  at least 3 places). 2010 form 1040a If the result is 1. 2010 form 1040a 000 or more, enter 1. 2010 form 1040a 000   12. 2010 form 1040a . 2010 form 1040a       13. 2010 form 1040a Multiply line 11 by line 12. 2010 form 1040a This is the amount of qualified education  expenses allocated to your distributions, and is tax free   13. 2010 form 1040a   14. 2010 form 1040a Subtract line 13 from line 11. 2010 form 1040a This is the portion of the distributions from this  Coverdell ESA in 2013 that you must include in income   14. 2010 form 1040a   15. 2010 form 1040a Subtract line 10 from line 3. 2010 form 1040a This is your basis in this Coverdell ESA as of December 31, 2013   15. 2010 form 1040a   Part III. 2010 form 1040a Summary (Complete only once)       16. 2010 form 1040a Taxable amount. 2010 form 1040a Add together all amounts on line 14 for all your Coverdell ESAs. 2010 form 1040a Enter here  and include on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line   16. 2010 form 1040a   Prev  Up  Next   Home   More Online Publications