Program qualified for 529 funds

Forum|Forum|2 years ago
August 24, 2023
1 reply
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My daughter is attending a cosmetology school in Anchorage, Alaska. I have not been able to determine if the program is qualified to use our 529 funds without additional tax/penalty. We reached out to the school and they said they are a qualified apprenticeship program through the Department of Labor; however, I cannot find the program on the list provided at apprenticeship.gov. Can I remove the funds as a qualified program based on the what the school tells me? Is there somewhere else I can look? Just trying to do the right thing. Thank you.

Bsch4477

Employee

Students can use a 529 plan to pay for trade school programs offered by a college that is eligible for Title IV federal student aid. This includes many cosmetology schools, technical colleges, culinary schools and even a golf academy. Students can search for eligible trade schools using the Federal School Code Lookup Tool.

If your school is not on the list ask the school why not.

Hal_Al

Employee

Even if the school is not on the Dept. of Education (DOE) list, it is still eligible if it is "a qualified apprenticeship program through the Department of Labor".

From IRS Pub 970 (page 51):
Eligible Expenses:

"5. The expenses for fees, books, supplies, and equipment required for the designated beneficiary’s participation in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act."*

Note that room and board would not be qualified expenses, if the school is not on the DOE list.

*For others reading this, note that this paragraph is specific to QTP/529 distributions and would not apply to the education credits. That is, the cost of a Labor department approved apprentice program would not qualify for a tuition/education credit, if the school was not also on the DOE approved list. QTP= Qualified Tuition Plan (e.g. 529 & CESA plans).