Are SAT prep class expenses considered qualified expenses for Coverdell accounts? Are there any guidelines for tutor qualifications?

[null8]

So, if my daughter's high school requires that she take the PSAT and administers it at her school, we can use Coverdell funds to pay for a Princeton Review-type course as "tutoring"?

[Rainman12 · Accepted solution]

Per IRS Pub 970: "Qualified Elementary and Secondary Education Expenses (Coverdell)                     These are expenses related to enrollment or attendance at an eligible elementary or secondary school. As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. There are special rules for computer-related expenses.

1. The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school.

   1. Tuition and fees.

   2. Books, supplies, and equipment.

   3. Academic tutoring.

   4. Special needs services for a special needs beneficiary.

2. The following expenses must be required or provided by an eligible elementary or secondary school in connection with attendance or enrollment at the school.

   1. Room and board.

   2. Uniforms.

   3. Transportation.

   4. Supplementary items and services (including extended day programs).

3. The purchase of computer technology, equipment, or Internet access and related services is a qualified elementary and secondary education expense if it is to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in elementary or secondary school. (This doesn't include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.)"           https://www.irs.gov/publications/p970/ch07.html#en_US_2015_publink1000178403             

[Rainman12]

Yes, I'd consider it within bounds of quoted Coverdell limits. NB: would NOT be considered a 'Qualified Education Expense' for most other tax purposes, but Does seem to fall within cited application ...

[null8]

Thanks! I thought so too, but wanted a second opinion.