I haven’t been able to figure this out via Google or the IRS. My D has a documented math disability and needs tutoring to get through required college math classes. I see the following in the IRS publication on 529s under qualified education expenses:
“Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible educational institution.”
That would make me think this would qualify, but I wanted to see if anyone had thoughts on this.
Investment advice can legally only be dispensed by a licensed rep. I suggest you call yours, or wherever you purchased the plan through for specific advice.
That said, hypothetically, to avoid any potential conflict, you could apply the 529 dollars you would like to spend on a tutor and apply that instead to room, board or tuition, thus freeing up the equal amount of funds for tutoring.
I’m no tax expert, but I think the answer is “definitely yes.”
It can be used for books, computers, software, meals, transportation, … Why not tutoring?
The suggestion to get tax advice is wise! Odds are, there will never be a need to document this sort of expense. But the problem that could arise is that most tutors are paid cash and that income for the tutor is not reported as income to the IRS for tax purposes. If the tutor is your “employee,” then the question arises as to whether you are liable for those employment costs. Maybe not if the total expenditure is below a certain threshold.
There are also tutors available at the colleges, sometimes even free of charge. In our experience, the quality of this tutoring is quite variable but the best results seem to come when the tutor is locked in early in the semester to a specific schedule, hopefully with some flexibility at exam time.