Can 529 funds be used for tutoring?

profdad2021
Wed, 01 Feb 2017 22:44:37 +0000

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.