I have a Qualified Tuition Plan (Section 529). How do I know if my expenses qualify tax free?

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Started ‎08-11-2017 by
Modified ‎08-11-2017 by

A qualified tuition plan (QTP) is a personal savings account. You use it to pay for a student's qualified education expenses. The student must go to an eligible school. Distributions from the account are tax-free if you use the money for qualified expenses like room and board.

 

A state or an agency of the state usually establishes QTPs, and most states now offer them. Also, most plans are open to residents of any state. A private educational institution can also start a QTP. However, you can only use the money to prepay qualified education expenses. 

 

An eligible educational institution is: 

  • One of these: 
  • College 
  • University 
  • Vocational school
  • Other postsecondary educational institution
  • Eligible to participate in a student-aid program administered by the Department of Education 

Contact your state government or the educational institution to find out if they participate in a QTP. 

 

To learn more, see these publications at www.irs.gov: 

  • Publication 525: Taxable and Nontaxable Income 
  • Publication 970: Tax Benefits for Education