529 Withdraw Max

[TaxHelp1234]

My child is living in off campus housing at university.  The rent is much higher than the living expense published  by the university.  There are some expensive housing options on campus, cost of these options will be higher than the one published by the  university. How much money can we take out from 529 for the off campus housing?  The high end of on campus housing or the living expense published by the university?

[tagteam]

@Hal_Al ?

[Hal_Al · Accepted solution]

Q. How much money can we take out from 529, tax free,  for the off campus housing?  The high end of on campus housing or the living expense published by the university?

A. The living expense published by the university.

From Publication 970:

"The cost of room and board qualifies (for a 529 plan distribution) only to the extent
it isn't more than:
• The allowance for room and board, as determined by
the eligible educational institution, that was included in
the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student; or
• If greater, the actual amount charged if the student is
residing in housing owned or operated by the eligible
educational institution."

I interpret that to mean: if your student actually lived in the "expensive housing options on campus", you could use that higher number.  But, since he is off campus, you are restricted to the allowance for attendance.