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Education
Thanks for confirming that all I have to do is to put the money back (within 60 days) to not incur the tax and the penalty. I will withdraw a reduced amount of money later ($4000 less) for my son's college qualified expenses. I read that if I claim for AOTC, I should subtract the amount of qualified expenses ($4000) that were used to calculate the AOTC . Otherwise, I might have to pay tax for the capital gain of the money withdrawn from 529 plan. Is that correct? Just want to make sure that I withdraw the right amount of money from 529 plan to get the best tax benefit. By the way, our income qualify for full AOTC.
March 29, 2021
9:39 AM