Educational expenses

I knew (or think I know) that the earnings from my child's 529 plan can be used tax free for required educational expenses. I think that means tuition but not room and board. Is that correct?

One of the schools that he is looking at requires freshmen to live on campus and anyone living on campus must pay for a meal plan. Does that mean that for freshman year the room and board expenses could be paid for with the 529 earnings without a penalty since these expenses are required of the student?

Thanks, Mark

Reply to
markalancaster
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On Monday, September 9, 2013 3:16:45 PM UTC-7, snipped-for-privacy@gmail.com wrote: | I knew (or think I know) that the earnings from my child's 529 plan can be used tax free for required educational expenses. I think that means tuition but not room and board. Is that correct?

Not quite.

Take a look at publication

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In particular item 3. Item 3a is from the school's official cost of attendance student budget. "Qualified education expenses. These are expenses related to enrollment or attendance at an Eligible educational institution (defined later). As shown in the following list, to be qualified, some of the expenses must be required by the institution and some must be incurred by students who are enrolled at least half-time. See Half-time student , later.

  1. The following expenses must be required for enrollment or attendance of a Designated beneficiary (defined later) at an eligible educational institution.

a. Tuition and fees.

b. Books, supplies, and equipment.

  1. Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible educational institution.

  1. Expenses for room and board must be incurred by students who are enrolled at least half-time. The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts.

a. The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.

b. The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. "

Reply to
taruss

Yes, even if he wasn't requried to stay in the school room and board, because he did he can use the 529. You can use the 529 to pay for expenses off campus, but there are rules.

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