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kmmo1998
New Member

How to waive 10% penalty (because of military academy attendance) on 529 plan earnings distribution? There is no question about academy attendance after the summary page.

 
4 Replies
MaryK1101
Expert Alumni

How to waive 10% penalty (because of military academy attendance) on 529 plan earnings distribution? There is no question about academy attendance after the summary page.

If you used the 529 funds for qualified educational expenses (military academy expenses) the distribution is tax free and the 10% penalty does not apply.  Check your entry in the education section to make sure your tuition was entered.

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Carl
Level 15

How to waive 10% penalty (because of military academy attendance) on 529 plan earnings distribution? There is no question about academy attendance after the summary page.

Take special note here:

When  you have a 529 distribution that was used for the allowed (though unqualified) expenses of room and board, it is extremely important that you work through the education section the way the program is designed and intended to be used. If you do not, then chances are extremely high that you will *NOT* be asked for those room and board expenses paid with 529 funds. Therefore, the distribution will be taxable.

kmmo1998
New Member

How to waive 10% penalty (because of military academy attendance) on 529 plan earnings distribution? There is no question about academy attendance after the summary page.

Does the 10% get waived for service academy attendance even if it is not for educational purposes? That is the assumption I was under.

Carl
Level 15

How to waive 10% penalty (because of military academy attendance) on 529 plan earnings distribution? There is no question about academy attendance after the summary page.

The money must be used for "qualified" education expenses, *or* the unqualified but "allowed" expenses of room and board *in direct support* of the education.

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