Are Room And Board Qualified Expenses For 529 Plans

Qualified 529 plan expenses include costs required for the enrollment or attendance at an eligible college or university.

Are room and board qualified expenses for 529 plans.

Room and board costs may be treated as qualified education expenses for 529 plan distribution purposes if the student is enrolled at least half time by the standards of the school. Paying for off campus housing with a 529 plan your student s room and board could be covered tax free for an entire 12 month lease even if he or she only takes classes for nine months of the year. Qualified higher education expenses for 529 plans. Qualified expenses for a 529 plan.

With a 529 college savings plan investments grow tax deferred and are not taxed when withdrawn to pay for qualified higher education expenses including tuition fees textbooks supplies and equipment required for enrollment special needs services and in some cases room and board costs. 529 plans offer tax free withdrawals when the funds are used to pay for qualified education expenses. A 529 plan only covers expenses that are related to post secondary education see below for using a 529 plan for elementary education however there are rules. This includes tuition fees books supplies equipment and in some cases room and board.

For many people keeping track is easy because large tuition bills use up most of their 529 savings. The allowance for room and board for the academic period and living arrangement for the student or. If enrolled half time or more yes. Most qualified expenses cannot exceed the cost estimates made by the school that the 529 beneficiary will be attending.

Room and board paid directly to educational institutions yes. If your withdrawals are higher than your qhee then taxes and potentially a penalty will be due on earnings that exceed your qualified expenses. Starting january 1 2018 this definition is expanded to include up to 10 000 in k 12 tuition expenses per beneficiary per year. But if you are using your 529 plan for room and board expenses it s smart to keep those receipts.

Non qualified 529 distributions may also be subject to recapture if a state tax deduction was claimed. Room and board paid directly to other landlord and. You must pay the expenses for an academic period that starts during the tax year or the first three months of the next tax year. Qualified room and board expenses may be no more than the greater of.

In general this includes costs of attending an eligible college or university. Qualified expenses are amounts paid for tuition fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution.