Hello. I have a question regarding my 529. My employer has offered to pay for my full part-time law school tuition at my local state university. The total will amount to roughly $15,000 dollars a year. If I understand correctly, I'm assuming I will be able to avoid the 10% penalty if I take out from my 529 the dollar amount equivalent (e.g., $15,000) of the reimbursement as a scholarship. I understand that i will still have to pay income tax on the earnings portion of the $15,000 dollar distribution as it is not a qualified expense, but I wanted to confirm if I would avoid the 10% penalty.
Also, a second question. I understand that I have to pay taxes on any tuition reimbursement after the initial $5,250 provided by my employer (e.g., I pay taxes on the remaining $9,750). Do I report only the money after the initial $5,250 (e.g., $9,750) or do I report all $15,000?
Thank you very much in advance!
