![]() Insurance – Health insurance and medical expenses, including student health fees.Electronics – Projectors, home theater equipment, photocopiers and other electronics primarily used for entertainment are not qualified unless they are specifically required by the school for enrollment or attendance.However, there have been several bills proposed to allow this, such as the SECURE Act. Student loans – You cannot pay back student loans using 529 savings (yet).Even if the beneficiary has a sports scholarship and must play, sports fees would not be considered qualified. Sports and activity fees – Fees for extracurricular activities cannot be reimbursed with funds from a 529 account.Travel – Transportation costs to and from the school do not qualify cars, airfare, gas, etc.As a result, you should contact your state and, potentially, a tax professional prior to making a withdrawal for K-12 tuition expenses. This means while your K-12 tuition withdrawal would be federal tax-free, the state may impose tax on earnings and – potentially – claw back any prior state tax benefits taken. Not every state conforms to federal code for this expense. ![]() However, this is limited to tuition only, and you need to be cautious depending on your state. As a result of the 2017 Tax Cuts and Jobs Act, up to $10,000 for tuition at public, private, or religious K–12 schools is now considered qualified.This includes transportation costs, which are generally not considered a qualified expense, as well as equipment such as a wheelchair or prosthetics. If the beneficiary has a disability, certain special needs services and equipment needed for enrollment or attendance may qualify.Now account owners can reimburse themselves for a laptop and printer without a worry. This is a recent change from the 2015 PATH Act for the benefit of 529 account owners, whereas previously the school had to specifically require these items. Computers, peripheral equipment, computer software, and internet access charges are all considered qualified expenses.The beneficiary must be enrolled at least half-time for room and board expenses to qualify regardless of whether they are on- or off-campus. So, if the total cost living off-campus exceeds the school’s allowance, the student would have to pay the difference using funds from another source. To be considered qualified, these costs must be less than or equal to the room and board allowance from the college’s cost of attendance figures (provided by the school example) or the actual amount charged by the school if living in on-campus housing. Room and board, which includes the costs of rent (whether living on or off-campus), and food.If a fee is not required by the school, such as drama club fees, it would be considered non-qualified. They are grouped because these are all expenses that must be required by the school for enrollment or attendance at the institution. Tuition, fees, books, supplies, and equipment are all qualified expenses.
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