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In case you didn’t know, paying for your child's housing expenses during their college enrollment is considered by Internal Revenue Code (IRC) 529 to be a "qualified higher education expense." Whether you're preparing to send your child to school soon or just need one more great reason to start saving, you should be aware that in addition to tuition and fees, room and board is a qualified expense. In order for you to use funds from your CollegeAdvantage account to pay for the housing expenses your child incurs during college, please note the following:
- Your student must be enrolled at a qualified school at least half-time.
- Room and board costs may not exceed the limits determined by the school for federal financial aid purposes. (Be sure to check every school year with the college for these dollar limits.)
- On-campus housing and off-campus housing are included (within the limits).
- Expenses of a special-needs student that are necessary in connection with his/her enrollment or attendance are considered qualified.
Now let's talk about how to get room and board expenses paid.
If the school lists your child's room and board on your tuition bill, when you make the withdrawal you have the option of requesting that we mail a check directly to the school. If your child's living expenses are separated from his/her tuition and fees expenses, then you will need to pay the property manager (or landlord, or fraternity/sorority, etc.) directly. For off campus housing withdraw the needed funds from your CollegeAdvantage account. We can deposit the money directly into your bank account, your student’s bank account, or mail a check directly to you or the beneficiary. For a refresher on withdrawing funds from your CollegeAdvantage account(s) and to see important timelines for withdrawals, review our guides for CollegeAdvantage Direct Plan or Guaranteed Plan accounts.
As is the case with all college savings 529s, the burden of proof for tax purposes for qualified expenses and withdrawals is on the Account Owner. Retain all documentation of your beneficiary's room and board and other 529-qualifed expenses.
Posted on March 3, 2016