Qualified withdrawals

You can use qualified withdrawals from a 529 account to pay for the following expenses (see Internal Revenue Code 529(e)(3)):

K-12. Any public, private, or religious school:

Tuition payments up to $20,000 per year per student.

Higher education. You can use 529 funds at any higher education institution in the country, not just Idaho, including:

Two or four-year colleges or universities.

Vocational/technical schools.

Career retraining schools.

Dual credit courses.

Graduate schools.

Eligible higher education expenses include:

Tuition and fees for students attending higher education.

Books, supplies, and equipment.

Expenses for special-needs services for a special-needs beneficiary incurred in connection with enrollment or attendance at an eligible educational institution.

Expenses for room and board for students enrolled at least half-time. The expenses for room and board qualify only to the extent that they aren’t greater than the following two amounts: The allowance for room and board, determined by the eligible educational institution, included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. The actual amount charged if the student is residing in housing that the eligible educational institution owns or operates. Contact the educational institution for qualified room and board costs.

The purchase of computer or related peripheral equipment, computer software, or internet access and related services, if the beneficiary will use them primarily during the time they’re enrolled at an eligible educational institution. (This doesn’t include expenses for computer software for sports, games, or hobbies unless the software is predominantly educational.)

Apprenticeship programs. Expenses required for participation in a program registered and certified with the Secretary of Labor under the National Apprenticeship Act.

Student loan repayments. Principal or interest on any qualified education loan of the beneficiary or a sibling of the beneficiary, up to $10,000 per individual.

Note: If a beneficiary doesn’t use the money in a 529 account, the account owner has options:

Let the account continue to grow tax deferred.

Change the beneficiary by transferring it to a family member of the current beneficiary.

Roll over the 529 funds into a Roth IRA. The account must be open for at least 15 years.

Take a taxable, non-qualified withdrawal (see below).