529 Off campus Room and Board

Forum|Forum|5 years ago
June 10, 2020
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I have a 529 plan that I intend to use for off-campus housing as it is not available on campus. The school has budgeted $3,795 for room $2,086 for food and $770 for transportation per semester. Can this all be put toward an apartment if I need it to be and if not can I still use 529 money for rent beyond what the school says is the COA by paying the 10% tax penalty.

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Hal_Al

Employee

You my use 529 plan money to pay for off campus room and board, up to the amount of the school's cost of attendance allowance (COA). Any amount over the COA can be paid with 529 money, but will be subject to both income tax and the 10% non qualified distribution penalty, on the earnings portion of the excess distribution.

Transportation is not a qualified educational expense, even if the schools has a COA for it. So, the earnings portion of that $770 would also be subject to tax and penalty.