If you received Form 5498-ESA, don't worry. This form is for your records and generally does not need to be entered on your tax return.
A Coverdell Education Savings Account (ESA) is a tax-advantaged account used to save for qualified education expenses. Form 5498-ESA reports contributions and certain rollover transactions made to the account during the tax year.
What Does Form 5498-ESA Report?
Form 5498-ESA shows:
- Contributions made to a Coverdell ESA during the year
- Rollover contributions transferred from another Coverdell ESA
- The total amount contributed on behalf of the beneficiary
Financial institutions issue Form 5498-ESA to the account beneficiary and the IRS for informational purposes.
Do I Need to Enter Form 5498-ESA on My Tax Return?
No. In most cases, you do not need to enter Form 5498-ESA when preparing your tax return.
The information reported on Form 5498-ESA is used to track contributions and rollovers to the education savings account. It is not a form that typically affects your individual income tax return.
How Are Coverdell ESA Withdrawals Reported?
Withdrawals from a Coverdell Education Savings Account are reported on Form 1099-Q, Payments From Qualified Education Programs.
If you received a Form 1099-Q, enter it in your return by following these steps:
- Select Federal
- Select Income
- Choose Select My Forms
- Select Less Common Income
- Choose Payments From Qualified Education Programs (Form 1099-Q)
Your Form 1099-Q may need to be reported even if the distribution was used for qualified education expenses.
Related Forms and Resources
Form 5498-ESA
Form 1099-Q
Need Help With Form 1099-Q?
While Form 5498-ESA is generally informational only, distributions from a Coverdell ESA reported on Form 1099-Q can affect your tax return. Be sure to enter any Form 1099-Q you receive so your education-related income and expenses are reported correctly.