Understanding Qualified Higher Education Expenses for Your 529 Plan
We wanted to address some common questions regarding what qualifies as “Qualified Higher Education Expenses” for distributions from a 529 Plan. Understanding these guidelines is crucial to ensuring that you maximize the benefits of your 529 Plan.
Allowable Expenses
The following expenses are generally eligible for 529 Plan distributions:
- Tuition and mandatory school fees
- Books, required educational software, and course supplies (e.g., notebooks, calculators, safety equipment)
- Computer purchases and internet access
- Room and board costs, including:
- Dormitory fees and campus meal plans
- Off-campus rent, utilities, groceries, and dining (must be less than the cost of on-campus housing or meal plans)
Note: For room and board expenses to qualify, the student must be enrolled at least half-time.
Non-Eligible Expenses
The following expenses do not qualify for reimbursement through a 529 Plan:
- Application and testing fees
- Extracurricular activity fees
- Phone bills
- Transportation costs (e.g., gasoline)
- Apparel or insurance
Additional Eligible Expenses to Know
Beyond traditional college costs, 529 Plans can also cover:
- Tuition for trade schools and registered apprenticeship programs (per the National Apprenticeships Act)
- Tuition at qualified primary or secondary schools (public, private, or religious), up to $10,000 per year per beneficiary
- Interest or principal on qualified education loans, with a lifetime cap of $10,000 per beneficiary (and per sibling of the beneficiary)
For detailed information, you may refer to the IRS publication available at IRS Publication, specifically on Page 8.
Should you have any questions regarding 529 Plans or your individual circumstances, please do not hesitate to reach out to our office. We are here to assist you.
