Q. If he sent me receipts for his unqualified educational expenses and I reimbursed him from his 529 account, is he responsible for any penalties and taxes, or am I?
A. It's your choice, but you have to decide before you ask the 529 plan administrator to make the distribution. You may designate that they send the money to you or him.
For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q. The 1099-Q gets reported on the recipient's tax return. The recipient's name & SS# will be on the 1099-Q.
Some foreign schools are eligible educational institutions.
See if your school is on the U.S. Department of Education’s Database of Accredited Post Secondary Institutions and Programs (DAPIP) or the Federal Student Loan Program list. (from IRS web site)
