In the above article, it says that if your student will have expenses soon (such as fall), it may make sense to leave them as a credit with the college, check your tax advisor.
I’m asking my 529 plan admin this question today. We don’t have a tax advisor!
My 529 plan says that as long as the refunds are used for qualified expenses during the same tax year, they can stay as a credit with the school.
I just got a refund a couple of weeks ago, and it went automatically into the Checking Account which is what the school preferred for faster disbursement and any potential misplace of the check in the mail.
My question is this: I am planning to take a courses in summer for which we have to pay by mid May. Does it make sense to use the refund against the summer course or go thru the hassle of sending it to 529? I was actually advised by the 529 plan to mail a physical check with a cover letter saying it is re-contribution. The physical check and letter is for my own records, as they will consider it as a new contribution. I did not ask about using it for the Summer (as I did not decide at that time for summer!)
I see from above (Pennlive & TS014), that I could use it as long as it is in the same year 2020.
Thoughts/Advise please?
Is the cost of the summer course more than or equal to the amount of the refund?
@SamSmi , you could ask your 529 plan. That’s what I did. Called the number, they aren’t answering and give an email address for questions; they got back to me within the day. Hopefully your answer lines up with mine! (My “refund” is a credit on my D’s tuition that I will just use towards her summer tuition).
Yes., summer tuition is more than the refund.
What about using it in Fall which is definitely way more than what they refunded.
Thanks. I will check, and report it here.
It sounds like either option is viable.
We spoke to the 529 (we have 2 - One for me and one for my sister. Two different plans). Mine said that you can use it for eligible expenses occurred this year. My sister 529 plan advised to re-contribute the money back with a note, though it will be considered as new contribution!
Why can not IRS spells out this, instead of this confusion!