What are eligible higher education expenses?
To qualify for federally tax-free withdrawals on earnings*, the money must be used for qualified higher education expenses of the beneficiary at an eligible educational institution. These expenses include tuition, mandatory fees, books, supplies, and equipment (including computers) required for enrollment or attendance; room and board during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a “special needs” student. Reference IRS Publication 970 for more detailed information on eligible expenses atwww.irs.gov/publications/p970/index.html.*Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.
Related Questions
- If I have related entity expenses that aren’t eligible for a deduction and I had similar transactions in years before the addback was required, will the deductions be allowed for those prior years?
- What is an eligible educational institution for purposes of qualified higher education expenses?
- What are eligible higher education expenses?
