Yes, you are correct.
However, if it's more beneficial taxwise for you (or your son) to use all or part of the tuition to claim an education credit (American Opportunity tax credit or Lifetime learning credit) and pay taxes on the corresponding earnings portion of the 529 withdrawal, you can use the more beneficial option. When the tuition is used to claim education credits, there is no penalty (only taxes) on the 529 earnings not used for education expenses.
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