KrisD15
Expert Alumni

Investors & landlords

After you enter the education section, the program asks if you want to "Maximize My Credit". If you click this bar, the program will match the expenses to the payments for the highest credit. 

If you want to do something different with your distributions and expenses, go back through the Education Section and enter the amount of expenses that you want to allocate towards the credit. 

 

It is completely allowable to allocate the 529 distributions to Room and Board if you so wish. The IRS will allow the highest credit as long as expenses are not used twice. 

 

It does not matter if you took a distribution at the bank, walked over to the school and made a tuition payment with the money from the bank. At year end, you can allocate the payment any way you feel fit. 

 

The IRS shows many examples of how distributions, scholarships, tuition, and room and board can be allocated in different ways to get the best education credit. 

 

IRS PUB 970

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