529 Withdrawal Timing question

Forum|Forum|2 years ago
December 16, 2023
2 replies
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My dependent child will be attending the graduate program starting in January 2024. He has paid for the following during September through December 2023.

- Deposit towards fees for the first semester (2024) (paid in September)

- Laptop (required for school) (paid in November)

- Books (required for school) (paid in December)

Should these expenses be considered qualified expenses for 2023 or 2024? I understand that withdrawal must be made in the same calendar year as the calendar year of expenses. I would appreciate prompt response as he has only a few days to make the withdrawal if it must be made in 2023. Thanks.

Best answer by Hal_Al

Q. Should these expenses be considered qualified expenses for 2023 or 2024?

A. 2023.

As you correctly understand, the 529 withdrawal (distribution) must be made in the same calendar year as the calendar year the "qualified" expenses were paid for. Expenses paid, in 2023, for an academic term beginning in the first quarter of 2024, are "qualified educational expenses' (QEE) for a 2023 distribution.

It is not optional. If you paid 2024 expenses, in 2023, you must take the distribution in 2023 and not wait until 2024.