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Q. Are amounts paid from a 529 for qualified education expenses taxable if the student drops out of school or withdrawals from classes?
A. No. At least, not just because he dropped out.
Q. My question relates to the portion that was NOT refunded. Is that amount still deemed having been paid for qualified expenses (i.e., NOT taxable)?
A. Yes. Expenses paid, and not refunded, are still qualified educational expenses, even if if he didn't finish the courses.
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