KrisD15
Expert Alumni

Education

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If I understand correctly that what you mean by Technology is Internet access, that would would be included with Books and Supplies. You would need to add those together and use the VA payment of 562.50 to be applied towards that. 

This would still leave you with out-of-pocket costs for Books and Supplies of $455.09 to apply to the distribution.

 

NO, You do NOT need to apply the excess Monthly Housing Allowance to Books and Supplies nor to Tuition. 

The additional $2,445.20 you paid for tuition may be applied towards the distribution. 

That gives you $2,900.29 out-of-pocket expenses. 

 

The IRS example below is talking about using expenses to claim an Education Credit, but the same logic can be applied to a 529 withdrawal.

 

According to the IRS:

"You have returned to college and are receiving two education benefits under the latest GI Bill: (1) a $1,534 monthly basic housing allowance (BHA) that is directly deposited to your checking account, and (2) $3,840 paid directly to your college for tuition. Neither of these benefits is taxable and you don't report them on your tax return. You also want to claim an American opportunity credit on your return. Your total tuition charges are $5,000. To figure the amount of credit, you must first subtract the $3,840 from your qualified education expenses because this payment under the GI Bill was required to be used for education expenses. You don't subtract any amount of the BHA because it was paid to you and its use wasn't restricted."

 

VA Link 

Additional IRS link 

VA payment link

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