- Instructions for Form 5498-ESA - Introductory Material
- Instructions for Form 5498-ESA - Main Contents
- Specific Instructions
Instructions for Form 5498-ESA (2020)
Coverdell ESA Contribution Information
For the latest information about developments related to Form 5498-ESA and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form5498ESA.
In addition to these specific instructions, you should also use the 2020 General Instructions for Certain Information Returns. Those general instructions include information about the following topics.
Who must file.
When and where to file.
Corrected and void returns.
Statements to recipients.
Taxpayer identification numbers (TINs).
Other general topics.
You can get the General Instructions for Certain Information Returns at IRS.gov/1099GeneralInstructions or go to IRS.gov/Form5498ESA.
Due to the very low volume of paper Forms 5498-ESA received and processed by the IRS each year, this form has been converted to an online fillable format. You may fill out the form, found online at IRS.gov/Form5498ESA, and send Copy B to the recipient. For filing with the IRS, follow the applicable procedures if you are required to file electronically, or, for this form only, if you are qualified to file on paper, send in the black‐and‐white Copy A with Form 1096 that you print from the IRS website.
File Form 5498-ESA, Coverdell ESA Contribution Information, with the IRS for each person for whom you maintained any Coverdell education savings account (ESA) during 2020.
A Coverdell ESA is a trust or custodial account created or organized in the United States exclusively for the purpose of paying the qualified education expenses of an individual who is the designated beneficiary of the trust or custodial account. The account must be designated as a Coverdell ESA at the time it is created or organized in order to be treated as a Coverdell ESA for tax purposes. The governing instrument creating the trust must meet the requirements of section 530(b)(1).
You must report contributions, including rollover contributions, to any Coverdell ESA on Form 5498-ESA. See the instructions under Box 1 and Box 2, later. If no reportable contributions were made for 2020, no return is required.
For contributions made between January 1, 2020, and April 15, 2021, trustees and issuers should obtain the participant's designation of the year for which the contributions are made.
Report on Form 5498-ESA all rollovers, including a direct trustee-to-trustee transfer from one Coverdell ESA to another Coverdell ESA. A rollover can be made from certain U.S. Savings Bonds or another Coverdell ESA. The contribution of a military death gratuity to a Coverdell ESA is a rollover contribution. Any amount distributed from a Coverdell ESA may be rolled over to another Coverdell ESA and is not taxable if it is paid no later than the 60th day after the date of such payment or distribution into another Coverdell education savings account, for the benefit of the same beneficiary or a member of the beneficiary's family who has not attained age 30 as of such date. The preceding sentence shall not apply to any payment or distribution if it applied to any prior payment or distribution during the 12-month period ending on the date of the payment or distribution.
Family members of the designated beneficiary include the beneficiary's spouse. Also included are the beneficiary's children, stepchildren, foster children, and their descendants; siblings and their children; parents, their siblings, and ancestors; stepparents; in-laws; the spouse of any of the foregoing; and any first cousin of the designated beneficiary.
Total distribution, no contributions.
Generally, if a total distribution was made from an account during the year and no contributions (including rollovers) were made for that year, you do not need to file Form 5498-ESA.
Report distributions from any Coverdell ESA on Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530). Any change in the beneficiary of the Coverdell ESA is not treated as a distribution if the new beneficiary is a family member (see above) of the prior beneficiary and has not reached the age of 30 (except for a beneficiary with special needs).
Statements to participants.
If you are required to file Form 5498-ESA, you must furnish a statement to the beneficiary (participant) by April 30, 2021.
For more information about the requirement to furnish statements to participants, see part M in the 2020 General Instructions for Certain Information Returns.
Truncating beneficiary’s TIN on payee statements.
Pursuant to Regulations section 301.6109-4, all filers of this form may truncate a beneficiary’s TIN (social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN)) on payee statements. Truncation is not allowed on any documents the filer files with the IRS. A trustee’s or issuer's TIN may not be truncated on any form. See part J in the 2020 General Instructions for Certain Information Returns.
The account number is required if you have multiple accounts for a recipient for whom you are filing more than one Form 5498-ESA. Additionally, the IRS encourages you to designate an account number for all Forms 5498-ESA that you file. See part L in the 2020 General Instructions for Certain Information Returns.
Enter contributions to a Coverdell ESA made from January 1, 2020, through April 15, 2021, designated for 2020.
Do not include rollovers in box 1. Report rollovers in box 2.