529 plan for secondary education

BelknapPoint
Tue, 04 Sep 2018 00:44:30 +0000

Thank you. I don’t understand the part about paying directly to her…take the distribution out put it in her bank account…then pay the school via her bank account? She’s not working so she doesn’t even file a tax return.

Generally, a 529 account owner can request that a distribution from the account be made payable to either the account owner, the beneficiary/student, or the school. There are tax implications based on your choice if all or any part of a distribution is used for a non-qualified expense. The earnings portion of a non-qualified distribution that is made payable to the beneficiary or the school will be considered taxable income for the beneficiary.