New to usage of 529 funds and could benefit from those who have learned the ropes:
In these circumstances: child will be age 19 at end of 2021, has moved out of parents’ house in February 2021 to live with boyfriend’s family (works and supports herself food- and clothing-wise but does not pay rent), will then move to live on campus as a full-time student in August 2021; therefore, the child will not qualify to be claimed as a dependent on parents' upcoming 2021 1040.
Given this, can the parents still pay for her college with 529 funds established by one of them as account owner and she as beneficiary? They plan on paying qualifying college costs incurred in 2021 out-of-pocket, then get reimbursed from the 529 by 12/31/21 and therefore be the recipients of the resulting 2021 1099-Q’s, which will be reported on their (not her) 2021 tax return (does this sound correct?)
Also, would his girlfriend’s parents be able to claim him as a dependent on their 2021 taxes if he lived there for 6 months rent-free (while he paid for his own food etc)?
