`529' might not cover off-campus living

March 12, 2006|By ANDREW LECKEY | ANDREW LECKEY,TRIBUNE MEDIA SERVICES

Which expenses can be covered with funds from a 529 college savings plan? Which ones aren't covered? I'm a parent.

- H.K., via the Internet

Named for Section 529 of the Internal Revenue Code, it is a qualified tuition plan whose withdrawals can only be used to pay for higher-education expenses.

"Basic expenses covered are tuition, mandatory fees, books, supplies, equipment required by the institution and, if the student is at least half-time, it can also cover room and board," said Joseph Hurley, a certified public accountant and chief executive officer of Savingforcollege.com LLC in Pittsford, N.Y.

"It must be for an accredited post-secondary school, which includes many vocational and foreign schools as well," Hurley said.

It's important to be aware of what costs do not qualify. Excluded are transportation and repayment of student loans. For equipment such as a computer, the school must require it in order for it to qualify.

There are also limits to room and board costs if the student lives off-campus, with the dollar figure for such costs to be provided by the school.

Andrew Leckey writes for Tribune Media Services.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.