Are Room And Board Qualified Expenses For 529 Plans

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.

Are room and board qualified expenses for 529 plans.

Qualified expenses for a 529 plan. Most qualified expenses cannot exceed the cost estimates made by the school that the 529 beneficiary will be attending. 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 higher education expenses for 529 plans.

Starting january 1 2018 this definition is expanded to include up to 10 000 in k 12 tuition expenses per beneficiary per year. Room and board paid directly to other landlord and. 529 plans offer tax free withdrawals when the funds are used to pay for qualified education expenses. If enrolled half time or more yes.

This includes tuition fees books supplies equipment and in some cases room and board. Since room and board costs are qualified expenses that means students with an on campus meal plan can pay for it with 529 funds. In general this includes costs of attending an eligible college or university. If your withdrawals are higher than your qhee then taxes and potentially a penalty will be due on earnings that exceed your qualified expenses.

Students living off campus can designate food as a qualified. The allowance for room and board for the academic period and living arrangement for the student or. But if you are using your 529 plan for room and board expenses it s smart to keep those receipts. For many people keeping track is easy because large tuition bills use up most of their 529 savings.

Room and board paid directly to educational institutions yes. Type of fee full time student at an eligible institution part time student at an eligible institution. Non qualified 529 distributions may also be subject to recapture if a state tax deduction was claimed. 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.

With a 529 college savings plan investments grow tax deferred and are not taxed when withdrawn to pay for qualified higher education expenses including tuition fees textbooks supplies and equipment required for enrollment special needs services and in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. 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.