Can 529 funds be used for Cooking Class?

[Xian2]

Hi, I am taking a 1 week cooking class, provided by an accredited Cooking school (the CIA) , the school participates in FASFA. As such the tuiton/fee seem to satisfy the criteria from 970 publication. However I don't have a T-1098, and the class is not part of any degree or Continuing Education program.

Can I use 529funds to pay for the tuition as Qualified education expense?

[DavidD66]

Qualified 529 plan expenses include costs required for the enrollment or attendance at a college, university or other eligible educational institution.

An eligible educational institution is a school offering higher education beyond high school. It is any college, university, trade school, or other post secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education.

You can look up whether or not your cooking school qualifies at:  eligible post-secondary educational institution.

If it doesn't qualify, you can use 529 plan funds to pay for it, but you will have to pay tax on the portion of the distribution that is income.

[Xian2]

Thanks David.. the school is on the list ...

the "grey part" is just that this is not really a College class or gets any CE credit...

this course is part of a program that the school provides to the public to create more revenues/profit

and I am not sure if this type of class then is a Qualified education expense

[DawnC]

If the school is an eligible school, then the costs of classes at the school are eligible expenses for 529 plans.  

If you aren’t sure if your school is an eligible educational institution:

• Ask your school if it is an eligible educational institution, or

•See if your school is on the Free Application for Federal Student Aid (FAFSA) code list or the U.S. Department of Education’s Federal Student Loan Program list.

TIP: A small number of schools, not on this list, may be eligible educational institutions. So, you may need to ask the school.

[Xian2]

thanks Dave,  I just try to see how TT handles the cost/deduction, and it seems it does not apply it correctly...

here is what I was doing

- go into Federal deduction - education section

- enter receipt of 1099-Q from 529 plan - at that point the expenses (income portion) is treated taxable - ie refund gets reduced

- after initial few questions, I am getting to the 1098-T

- since for this pgm they don't provide 1098, so I say no

- on next page I say that an exception apply (assuming that school is not required to send 1098)

- I get some monies credited back , but not as much as was reduced before

and on summary form it stated that neither AOC, LLC nor tuition/deduction (form 8917) does not apply

what should I make of this?

[Xian2]

... just to add to it...  after trying differnt paths to add 1099-Q and education expenses,  I always get TT message:

YOU CANT CLAIM EDUCATION TAX BREAK

not eligible because either

1. QTP distribution exceeded education expense  .....  comment: which they did not

2. there were no qualified education expense

I added all info as much as I could w/o having a 1098-T ....  is missing a form is the key issue or how else would I enter my info

thanks

[DawnC · Accepted solution]

You cannot claim the American Opportunity Credit nor the Tuition and Fees Credit without a 1098-T.  They require you be attending degree-seeking programs.  The only education credit you may qualify for would be the Lifetime Learning Credit.  Also, your 529 plan distribution should not be taxable.   Check out the MAGI and other requirements for the LLC to verify you qualify; it is a nonrefundable credit.  

One another thing to check.  Your fees should not be listed as tuition since you don't have the 1098-T.  Somewhere in the education section should be a spot for 'Other Fees''.  Try reporting your expenses for the class there and see if that helps.