Author Topic: Can I use 529 funds for an online high school course for my son?  (Read 628 times)

RedwoodDreams

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I know the rules for using 529 funds changed to allow use of the funds for private elementary or high school tuition, but I can't find any information about the possibility of using the funds for an online high school course my son is taking (through an accredited HS site) this semester. I would guess not, but does anyone have experience with this?

secondcor521

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Re: Can I use 529 funds for an online high school course for my son?
« Reply #1 on: March 22, 2019, 12:31:16 AM »
The expenses would probably be qualified.  See Qualified Education Expenses on page 51 of Publication 970, which is in Chapter 8, which covers QTP's, which is the IRS term for 529 plans:

https://www.irs.gov/pub/irs-pdf/p970.pdf

"Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. For purposes of QTPs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses."

"Eligible elementary or secondary school. An eligible elementary or secondary school is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law."

YttriumNitrate

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Re: Can I use 529 funds for an online high school course for my son?
« Reply #2 on: March 22, 2019, 08:05:59 AM »
The expenses would probably be qualified.  See Qualified Education Expenses on page 51 of Publication 970, which is in Chapter 8, which covers QTP's, which is the IRS term for 529 plans:
https://www.irs.gov/pub/irs-pdf/p970.pdf
Don't forget that the rules for a 529 plan are state specific. Some states wrote the previous definitions into their statutes, so they were unaffected the federal changes, while some states just incorporated by reference so their laws changed as soon as there was a change at the federal level. Since the federal changes, the some states have taken action to undo the impact of the federal changes. For example, here in Indiana the federal 529 definitions were incorporated by reference, but the legislature is working on a bill to shift the definitions back to their original form.

reeshau

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Re: Can I use 529 funds for an online high school course for my son?
« Reply #3 on: March 22, 2019, 09:40:24 AM »
The expenses would probably be qualified.  See Qualified Education Expenses on page 51 of Publication 970, which is in Chapter 8, which covers QTP's, which is the IRS term for 529 plans:
https://www.irs.gov/pub/irs-pdf/p970.pdf
Don't forget that the rules for a 529 plan are state specific. Some states wrote the previous definitions into their statutes, so they were unaffected the federal changes, while some states just incorporated by reference so their laws changed as soon as there was a change at the federal level. Since the federal changes, the some states have taken action to undo the impact of the federal changes. For example, here in Indiana the federal 529 definitions were incorporated by reference, but the legislature is working on a bill to shift the definitions back to their original form.

This is a fair point, but 529's are also portable, so at most it would mean you need to find a state whose definition is friendly to your idea, and transfer there.  If you are in your home state's plan, that may mean the loss of a state benefit. (tax deduction, credit, or match) Of course, you always need to judge the relative performance and cost of a plan before you moved.

secondcor521

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Re: Can I use 529 funds for an online high school course for my son?
« Reply #4 on: March 22, 2019, 10:23:17 AM »
The expenses would probably be qualified.  See Qualified Education Expenses on page 51 of Publication 970, which is in Chapter 8, which covers QTP's, which is the IRS term for 529 plans:
https://www.irs.gov/pub/irs-pdf/p970.pdf
Don't forget that the rules for a 529 plan are state specific. Some states wrote the previous definitions into their statutes, so they were unaffected the federal changes, while some states just incorporated by reference so their laws changed as soon as there was a change at the federal level. Since the federal changes, the some states have taken action to undo the impact of the federal changes. For example, here in Indiana the federal 529 definitions were incorporated by reference, but the legislature is working on a bill to shift the definitions back to their original form.

Good point.  I live in a lackadaisical state that generally goes along with the federal government on things like this.