529 withdrawals are for two basic types of expenses.
1. the qualified education expenses of tuition, books, and lab fees.
2. The unqualified but allowed expenses of room and board, provided that room and board is "in direct support" of the education. (Transportation does not fall into this.)
Withdrawal for any other reason is subject to tax and a possible withdrawal penalty.
It's also important that when you make a withdrawal, that you utilize that withdrawal for one of the above two stated purposes in the same tax year the withdrawal is made. Otherwise, it would be considered an unqualified withdrawal and taxed.
In addition to taxes on an unqualified withdrawal, penalties could be assessed too. It just depends on the plan.
Now there are exceptions that would negate any penalties that may be assessed. But it will not negate the taxability of the withdrawal. Transportation is not one of those exceptions unless it qualifies under one of the exceptions - such as unforeseen medical emergency expenses. Such an exception is a SCH A deduction and subject to the 7% of AGI rule before any destructibility benefit would kick in.
Finally, understand that the withdrawal will result in a 1099-Q being issued to the name beneficiary of the fund at the time the withdrawal was made.
