![]() ![]() You generally are permitted to change the beneficiary to another qualified member of the family, as defined under the Internal Revenue Code, without triggering income tax and 10% additional federal tax. Please consult your tax advisor for specific advice regarding such distributions.ĢSome restrictions apply. State tax treatment of distributions for certain qualified education expenses may differ. Any earnings withdrawn that are not used for qualified higher education expenses are subject to federal income tax and may be subject to a 10% additional federal tax, as well as to state and local income taxes. ![]() The beneficiary dies and the withdrawal is paid to the beneficiary’s estate.Īlso, even if your child gets a scholarship and doesn’t need the money for tuition, you may still have expenses to pay, such as fees, computers, books and supplies, and room and board (for students attending at least half time).ġTo be eligible for favorable tax treatment afforded to any earnings portion of withdrawals from Section 529 accounts, such withdrawals must be used for qualified higher education expenses, as defined in Section 529 of the Internal Revenue Code.You can withdraw up to the amount of the scholarship from your account. The beneficiary receives a scholarship.You will need to pay taxes on any earnings, plus a 10% penalty of those earnings. Withdraw the money and use it however you like.Starting in 2024, account owners can add unused funds from a 529 account to a Roth IRA for the benefit of their student.Transfer the savings to another eligible family member, 2 such as a sibling or even yourself–you could use it for your own higher education!.It can still have the opportunity to grow tax-deferred until your child decides to attend college in the future. There is currently no time limit on when funds must be withdrawn. Leave it invested! The money you invested can stay in the account.If your child doesn’t choose to go to college (and remember, college includes trade and vocational school, two-year programs, even qualified online courses), you have some choices. You can also use up to $10,000 per year for the same beneficiary to pay for K-12 tuition at an eligible elementary or secondary school (although some states still consider K-12 tuition a non-qualified expense). ![]() A maximum of $10,000 can be withdrawn to pay for principal or interest on qualified student loans of the designated beneficiary or a sibling of the beneficiary. In addition, NextGen 529 account funds can be used to pay for fees, books, supplies, and equipment required for the participation of a beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act. Qualified education expenses generally include expenses such as tuition and fees, computers, books and supplies, and room and board (for students who attend school at least half time). You can use your NextGen 529 account funds to pay for a variety of qualified education expenses 1 at eligible higher education institutions, which include four-year colleges or universities, accredited two-year associate degree programs, vocational schools, trade schools, even qualified online courses– any post-secondary schools that participate in federal financial aid programs-at home or abroad. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |