I paid for my son’s first semester of college and am now looking to reimburse myself from the 529 plan I own with him as a beneficiary. My understanding is that most mandatory school fees are qualified expenses when it comes to 529 plans, but there are a couple that I paid on his behalf that I’m not sure of. I’d appreciate any guidance that could be shared.
Fee #1: “Accepted student/enrollment fee.” After he was offered admission, we paid a mandatory $100 fee to accept his spot at the school and enroll him in the program.
Fee #2: “Housing application fee.” The program he was offered a spot in included guaranteed housing in an on-campus “Living, Learning Community.” Despite that guarantee, in order to get a dorm room to live in, we needed to pay a mandatory $100 housing application fee to secure a spot (in addition to directly billed room and board costs).
The other mandatory fees we paid were tacked on directly to the direct bursar’s bill and look to be very clearly ones that qualify for reimbursement from the 529 plan.
Thanks in advance for your guidance and direction.
Here are screen shots of the Qualified Educational Expenses for 529 plans (AKA Qualified Tuition Plans or QTPs) from IRS Pub 970 2022 Publication 970 (irs.gov)
Since this fee is related to the enrollment at the school, it would seem to be covered.
If this fee, added to the room and board costs at the school, does not exceed the allowance for room and board as determined by the school, then it should be allowable. But you need to check with the school to see what the allowable room and board expense is. It is possible that not even all of the room and board expense that you are paying is an allowable expense, if, for example, you are paying extra for a single room, and the allowable expense is based on double occupancy. So, if you are direct billing this expense out of the 529 plan, I’d be sure to check to ensure that what the direct billing will be does not exceed the allowable expense for the school.
Upon closer reading, it looks like the $100 housing fee would qualify.
To quote from what AJ Posted:
“The expense for room and board qualifies only to the extent that it isn’t more than the greater of the following two amounts…
…b. The actual amount charged if the student is residing in housing owned or operated by the school.”
The fee was charged by the school and he is living in housing owned and operated by the school.
