Question

If I funded my dependent's 529 plan and used those funds to pay eligible education expenses, can I deduct the expenses on my federal return?

Forum|Forum|7 years ago
June 6, 2019
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Employee

You cannot claim any of the college tax credits, including the AOTC, based on expenses that were used to calculate the tax-free portion of a distribution from a 529 college savings plan. The AOTC may be claimed in the same year that a tax-free distribution is made as long as the same expenses are not used to calculate the tax-free distribution AND the American Opportunity Tax Credit.

For example, if you take $12,000 out of a 529 college savings plan to pay for tuition you cannot use that $12,000 of tuition expenses to claim the American Opportunity Tax Credit also.