I think the first one applies directly to 529 contributions and payouts.
The second applies to being able to deduct education expenses on your income tax filing, which is different than what you can do within a 529 Plan. You can pay for room & board from your 529, but you can’t deduct room & board from your tax return.
That’s my understanding, too, especially since R&B comprise so much of college costs. It would seem a considerably weakened benefit otherwise.
An article discussing this:
For room and board expenses to be considered qualified, the student has to be enrolled in an eligible college program on at least a half-time basis. Qualified room and board costs can include both on- and off-campus housing costs, as long as they were incurred during an academic period during which the student is enrolled or accepted for enrollment in a degree or certificate program or another program leading to a recognized education credential.
“Eligible college program” will be almost any accredited US college or university, but the link has a lookup table for ascertaining this.
This is the citation that is relevant to 529 plans, since the title of the document you cited is Guidance on Recontributions, Rollovers and Qualified Higher Education Expenses under Section 529
This citation is specific to tax credits (American Opportunity Credit and Lifetime Learning Credit). In fact, in this citation, below where you took your quote from, it specifically says that if you’ve used 529 (i.e. tax-free) funds to pay for the expenses, they aren’t eligible for the credits, since there is no double dipping:
### Expenses Cannot Be Paid with Tax-Free Funds
You cannot claim a credit for education expenses paid with tax-free funds. You must reduce the amount of expenses paid with tax-free grants, scholarships and fellowships and other tax-free education help.
That’s not correct. Each college sets a ‘room and board allowance’ for their area. Room and board expenses (rent, food, utilities, etc.) up to that allowance amount are eligible 529 expenses, as long as you have documentation for the expense.
No. Form 8815 2022 Form 8815 (irs.gov) is the form used to exclude EE and I bond interest from income. The instructions for line 2 (on page 3 of the form) say:
Line 2 Qualified higher education expenses include tuition and fees required for the enrollment or attendance of the person(s) listed on line 1, column (a), at the institution(s) listed in column (b). They also include contributions to a Coverdell ESA or a QTP for the person(s) listed on line 1. Qualified expenses do not include expenses for: • Room and board; or • Courses involving sports, games, or hobbies that are not part of a degree- or certificate-granting program. Do not include on line 2 expenses that were: • Covered by nontaxable educational benefits paid directly to, or by, the educational institution; • Used to figure an education credit on Form 8863; or • Used to figure the nontaxable amount of a distribution from a Coverdell ESA or QTP.