AmyC
Employee Tax Expert

Deductions & credits

Yes, I gave the link earlier to Publication 970, Tax Benefits for Educationwhich explains how 529 covers the room and board. The 529 expenses do not count towards a tax credit but do keep you from having taxable 529 income. You have moving parts.

1. You want the 529 income to not be taxable to you.

2. You want education credit if possible. That may mean making some scholarship or 529 taxable to the student.

 

If all of your 529 goes towards room and board and tuition, it is not taxable and does not qualify for tax credit.

If you have up to $4000 paid out of pocket (not 529) for tuition, and your income is within the limits I posted above, then you would get education credit.

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