Q. Can I reimburse myself from his 529 for room/board/living expenses?
A. Yes.
Q. Do I simply withdraw the exact amount the school gives as the allowance?
A. Yes. That's the bottom line answer. You are unlikely to be questioned by the IRS; and if you are questioned, they are most likely going to accept the school's allowance for cost of attendance. Your school's allowance appears to be low. So, that increases the likelihood.
Q. Or do I need to save every single grocery receipt and utility bill?
A. No. The IRS is most likely going to accept the school's allowance.
Q. Or do we need to have an actual rental agreement?
A. No, particularly with the $6512 low yearly allowance.
The rule is: 529 money can be use for off campus living, but you are limited to the lesser of your actual costs or the school's "allowance for cost for attendance".
The student must be half time or more.
