My daughter received money for “Covid-19” relief (via the American Rescue Plan) from her state university for Fall 2021. (All students who enrolled for Fall 2021 received this money.). This is NOT a refund for any past tuition or room and board. My question is how to handle this with our 529 plan. Do these funds need to be put into the 529 plan or is this money free to use for any purpose? Also, how will this money be handled for 2021 taxes?
(I have researched this on the IRS website, the Internet, have spoken to the 529 plan administration, and the school, and have no answers…)
