Paying through 529 plan

swimcatsmom
Sun, 21 Nov 2010 18:35:33 +0000

Actually, last time I checked, computers don’t qualify as a legitimate 529 expense unless the computer is REQUIRED by the school.

For the 2009 and 2010 tax years you can use 529 account funds to pay for a computer for the student. It was a change in the rules in the same bill that passed the American Opportunity Tax Credit. As far as I know they have not extended this beyond the 2010 tax year (yet).

from IRS 970 2009 rules for qualified edication plans

The purchase of computer technology, equipment, or Internet access and related services if it is to be used by the beneficiary and the beneficiary’s family during any of the years the beneficiary is enrolled at an eligible educational institution. (This does not include expenses for computer software for sports, games, or hobbies unless the software is predominantly educational in nature.)