@jcpeckham wrote:
My understanding is that there is no express IRS guidance on the issue of timing on scholarship-related 529 withdrawals.
As you said, there is no specific guidance. However, if I remember correctly and based on other indirect things, it is the opinion of many/most tax professionals that the withdrawal needs to correspond with the year of the expense.
I guess it may come down to how much you want to risk the "gray area".
As a side note, don't forget that (1) it may be an option to transfer the 529 plan to a new beneficiary and (2) if the account has been open for at least 15 years (and funded at least 5 years ago), it may be an option to convert some of the 529 funds to a Roth IRA.
