Scholarship Stipend and 529 Plan

collegework
Wed, 30 Aug 2017 15:27:01 +0000

Thank you @BelknapPoint. But even if I don’t “submit” expenses, and the university uses the stipend to reduce the amount of our bill to them for QEE…am I allowed to consider using the 529 to pay the entire amount of the bill without paying taxes on that?

I think I should have explained this differently from the get-go. I’m trying to figure out how much my parents will be able to pay from their 529 account without being taxed. Assuming Room/Board is $8,000, but we are given a $3,500 stipend from the university which they then apply to our bill so it now shows we only owe $4,500 - how much can my parents pay from their 529 account without being taxed? $8,000 or $4,500? I realize that if they are able to pay the $8,000 with 529 funds that that means we will be paying taxes on the stipend that will essentially be used for other non-QEE such as travel, etc.

Thanks!