For example, if a family waits until January to pay tuition, they need to make sure that the 529 withdrawal is made in the same tax year.īe mindful of double dipping. That is, the plan distributions must be made during the same tax year that the qualified expenses are incurred. Families should remember that qualified expenses have to be timed with the 529 distribution. At the same time, there could be fewer costs for students studying at home. Most insurance plans only offer a refund if a child becomes sick, and not if the school decides to have all students study remote. These costs would also not likely be covered by tuition insurance. These costs are not considered qualified expenses for a 529 plan. Students who had planned to live in a college dormitory but changed plans to live in off-campus housing may have unexpected transportation needs. Families will need to consider other sources to fund certain non-qualified expenses. Since 2015, the purchase of a computer and any related peripheral equipment, computer software, or Internet access and related services are considered 529 qualified expenses.
#IRS 529 QUALIFIED EXPENSES SOFTWARE#
While there may be fewer textbook purchases, students may need additional software to submit homework.
#IRS 529 QUALIFIED EXPENSES UPGRADE#
Due to the pandemic, students working at home may need to upgrade computer equipment or enhance WIFI and internet services. Some colleges do not make any distinction in cost between on-campus and living at home.Ĭomputer-related expenses are also considered qualified under 529 plans. Some colleges may specify a cost for “commuters” or “at home.” Still, the student at home would only be able to use the 529 savings for the lesser amount.
But the cost allowable must be lower than the cost of living on campus. Students living off-campus should keep records and receipts to validate the expense.įamilies may also be able to use 529 assets for room and board for students living at home. There is a stipulation, however, that these expenses cannot exceed the college or university’s published allowance for room and board, even if the off-campus expenses are higher. In general, if students are living off campus, rent, food, and utilities expenses can be considered qualified expenses for a 529. Some students may have changed plans and are living off campus this semester or year.įamilies need to find out how the college is defining room and board and what rules have been established. Because of the pandemic, many colleges have changed to a remote curriculum. While college may be a remote - and quite different - experience for many students this fall, most college-related expenses remain the same.įamilies may consider using a 529 college savings plan to cover qualified expenses even if their child is studying at home.Īs a significant part of the college bill, room and board is considered a qualified expense under 529 plans.
0 kommentar(er)
