Is Room And Board Covered By 529

The student must be enrolled as a regular student on at least a half time basis.

Is room and board covered by 529.

Opening a 529 plan to save for your child s college expenses can be a great way to build savings while reaping tax benefits. Room and board costs make up a large portion of a student s total college bill second only to tuition you can use a 529 plan to pay for room and board but only if certain requirements are met. Non qualified 529 distributions may also be subject to recapture if a state tax deduction was claimed. Qualified 529 plan expenses include costs required for the enrollment or attendance at an eligible college or university.

Dorm room furniture and decorations. But if you are using your 529 plan for room and board expenses it s smart to keep those receipts. This includes tuition fees books supplies equipment and in some cases room and board. Room and board are covered by 529 withdrawals as long as you have an education savings plan generally the prepaid plan cannot be used to cover these expenses and you are at least a part time student.

Starting january 1 2018 this definition is expanded to include up to 10 000 in k 12 tuition expenses per beneficiary per year. If a 529 plan distribution is used to pay for room and board it is a tax free qualified distribution in certain circumstances and a taxable non qualified distribution in other circumstances. However that doesn t mean you can use your plan money to decorate your room in the latest trendy style. Some of the benefits of a 529 plan include tax free growth and tax free withdraws if the money is used for qualified education expenses but one thing that stops many would be 529 owners is understanding what exactly a 529 plan will cover what exactly are qualified.

Off campus housing and rentals are qualified up to the cost of room and. 529 plans offer tax free withdrawals when the funds are used to pay for qualified education expenses. 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. In general this includes costs of attending an eligible college or university.

The irs does not require that students live on campus for room and board expenses to qualify but there is a limit on the amount of expenses that are covered. Room and board includes the cost of housing and the cost of a meal plan. Colleges typically have a room and board budgets for students who live on campus in college owned or operated housing for. As of 2012 529 plan funds could be.