One Coverdell ESA Rollover Allowed Per Individual, Per Year

Posted by Kim Chen on September 21st, 2016

In a Program Manager Technical Advice (PMTA), the IRS has indicated that, because the language dealing with rollovers of IRAs in IRC Sec. 408(d)(3)(B) is so similar to the rules on Coverdell Education Savings Accounts (Coverdell ESAs) in IRC Sec. 530(d)(5) , only one rollover for a Coverdell ESA is allowed per individual, per year. Therefore, only one rollover from a Coverdell ESA can be made to another Coverdell ESA in any 12-month period, regardless of how many Coverdell ESAs the individual owns. However, unlimited transfers from one Coverdell ESA trustee can be made directly to another ESA trustee because such transfers are not considered distributions or rollovers. PMTA 2016-010.