Hey all,
I did not know where to post this, but this seems to be the best forum for 529 questions.
My scenario: I am graduating undergrad in May of this year and moving cities to go to dental school. Dental school does not start until July, so I was wondering if I could use the 529 account to pay for rent during those summer months between school. Technically, the July term for my dental school is a summer term and goes on 25/26 FAFSA if that helps…
I really appreciate the advice!
Edit: I am moving in May right after graduation btw
529 Account Usage Between Undergrad and Grad School
byu/Reasonable-Deal-8481 inpersonalfinance
Posted by Reasonable-Deal-8481
2 Comments
Honestly I don’t think you can use 529 for rent unless you’re enrolled at least half-time during that period. If the July term counts, maybe… but those May-June months might be a gray area. I’d call your 529 plan administrator directly.
Let’s separate two things:
* Taking money out of the 529
* Tallying up *qualified* educational expenses
If the first one is > than the second one (money out of 529 is *more* than qualified educational expenses), then you would have tax/penalty to pay.
If the first one is < than the second one (money out of 529 is *less* than qualified educational expenses), then there are no issues.
Do you see where I’m going with this?
So you can pull out whatever money you want and use it in whatever way you want. You just need to be able to (by the end of the year) have enough qualified educational expenses to match up to the amount you distributed.
The June rent would *not* qualify as a qualified educational expense. But you can use *other* qualified educational expenses to offset the distribution.