Yes. One of the rules for 529 savings plans, is that the money must go toward covering qualified education expenses. If not, the earnings portion of any withdrawals will be subject to taxes and a 10% penalty.
In order for you to avoid the taxes you can rollover a Qualified Tuition Program (QTP) 529 Plan if you do so within 60 days of the date of the distribution. It can be rolled over to another QTP for the same beneficiary or a member of the family or to an ABLE account for the same beneficiary or a member of the family. If you are considering rolling the funds to an ABLE account, there are annual contribution limits.
For additional details, please review the IRS Pub 970 - Tax Benefits for Education.
[Edit 2/10|1:23pm PST]
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