"Special needs services" are in the list of qualified higher education expenses. Where can I find a definition or an authoritative explanation of what's included?

Forum|Forum|3 years ago
March 29, 2023
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This is related to spending under standard 529 plan (not Able acct). I have searched the regs and web but not finding anything solid.

Best answer by Hal_Al

Thanks, tried all that and the plans/administrators don't know. So thought I would also poll here to see if anyone had some pointers before going to tax specialist/atty. We are making rollovers to Able but since it's subject to annual cap, better if we can spend directly from 529,

I don't think you're going to find a detailed answer.

This phrase appears several times in Pub 970:

"Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible postsecondary school."

I'm of the opinion you'll know a special needs expense when you see it.

CatinaT1

Can you give us some more information? When you say qualified higher education expenses are you referencing College Education Credits? Are you referring to a state or federal credit?

Once we know what you are specifically referring to, we can help!

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cjoz3561Author

Ah, I mistakenly cut out that I'm talking about distributions from a 529 (not Able acct.). We have a standard 529 (in addition to Able acct) and want to know more specifically what qualifies as "special needs services" under the former while in college so we can spend that down as much as possible and spare the Able acct for post-college expenses.

CatinaT1

I don't know that there is a standard definition for "special needs services" because each individual is different when it comes to their needs. There might be specific information in the plan documents. 529 Plans are offered and administered generally through the state you set your plan up with. You might want to check with the plan administrator to see if the state your plan is offered through has specific definitions.

Additionally, so you know, you can make a tax-free transfer of 529 funds into an ABLE account.

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