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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I have been contributing to a 529 plan kids college years.

Customer Question

I have been contributing to a 529 plan for my kids college for several years. They are now in college and incurring qualified expenses. I haven't been pulling the money out to pay for those expenses, but have been tracking the amount spent. When I pull the money out in later years, can I offset the earnings with the expenses I incurred in previous years?
Submitted: 12 months ago.
Category: Tax
Expert:  Lev replied 12 months ago.

Hi and welcome to our site!
For 529 plan distribution purposes - ONLY qualified education expenses paid during the year of distribution are considered.
Educational expenses paid in other tax years - before or after distributions are not relevant.
Please consider that when you plan distributions.

Customer: replied 12 months ago.
Thanks.
Expert:  Lev replied 12 months ago.

Please be aware that same rules are used when determination is made for educational credits or other educational benefits.
All qualified expenses are considered if paid during the specified tax year.
Let me know if you need any help with specific expenses or reporting.

Expert:  Lev replied 12 months ago.

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If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.

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