The rules in this chapter
- 1Getting a PlanCollege, vocational schools, and apprenticeships each can be qualified expenses with a 529 account.
- 2How much should I help?There are numerous ways to financially “help” children.
- 3What schools are “qualified”?If you can fill out a FAFSA student aid form for the school, you have a good indication that costs will be qualified.
- 4529 accounts have limited effects on the need-based student aid calculation.A significant difference between 529 plans and UTMA/UGMA or other accounts is their treatment under federal need-based financial aid formulas.
- 5You may pay for tuition, books, or fees with a 529 account.This seems straight forward, but what about scholarships or grants?
- 6Registered apprenticeship expenses qualify.Similar fees, books, supplies, and equipment required for a beneficiary’s apprenticeship are qualified expenses.
- 7Postsecondary Credentialing, Certificates, or Licensing expenses qualify.Fees, books, supplies, and equipment required for a beneficiary’s credentialing expenses are valid uses of the 529 account funds.
- 8What if your beneficiary receives a scholarship?If the scholarship is granted, funds may be withdrawn without a penalty up to that scholarship amount – though taxes on the interest are still owed.
- 9You may pay for room and board if the student is enrolled one-half time.Note that your child’s account may not be used to take others to lunch.
- 10You may pay for computer hardware, software and internet access fees while enrolled.Computers, peripheral computer equipment, software and internet access expenses are each qualified while the beneficiary is enrolled at the eligible education institution.
- 11What may you NOT spend your 529 funds on?Examples of expenses for which the 529 account funds should not be used include: transportation, car or health insurance, or Spring break trips.
- 12Account owners are responsible for keeping any documents that support a qualified or nonqualified withdrawal.Be sure to keep bank statements or receipts to help with any potential question of a qualified expense.