You’ve been saving, and now you’re ready to make a withdrawal.
Here’s what you need to know.
How to withdraw funds
- Online. Log in to Account Access. Click Withdrawals. Funds can be deposited electronically into your or your beneficiary’s bank account.
- Mail or fax. Submit a Withdrawal Request form (Form 300). You can instruct my529 to mail a check to you, your beneficiary, the school where your beneficiary is enrolled, to another 529 college savings plan, or to an ABLE account. Withdrawals to pay for K-12 tuition expenses will be sent only to the account owner.
- Some withdrawals may require a signature guarantee. Read the Program Description for more information.
- my529 is required by federal law to issue an IRS Form 1099-Q when funds are withdrawn from an account. Read the Program Description for more information.
Qualified higher education expenses
- Tuition, mandatory fees, textbooks, supplies, and other equipment required to attend any college, university, or technical school in the United States or abroad that participates in federal financial aid for students.
- Computers, peripheral equipment, educational software, and internet access and related services when used primarily by the beneficiary while enrolled at an eligible educational institution.
- Room and board expenses, if they do not exceed the amount specified in the cost of attending the school where your beneficiary is enrolled at least half-time. Read the Program Description for more information.
- Expenses for services for a special needs beneficiary to enroll and attend an eligible educational institution.
- K-12 tuition expenses at public, private, or religious schools
Examples of nonqualified expenses
- Room and board expenses that exceed amounts specified in the cost of attending the school where your beneficiary is enrolled
- Travel and transportation expenses
- Student loan payments
- Insurance payments
- Sports and entertainment expenses
- Fraternity and sorority fees
Tax penalties for nonqualified withdrawals
- The earnings portion of a nonqualified withdrawal is subject to federal income tax and—for Utah residents—Utah state income tax.
- The earnings portion of a nonqualified withdrawal is also subject to an additional 10 percent federal tax penalty, except in limited circumstances—a beneficiary’s death, disability, receipt of a scholarship, or attendance at a U.S. service academy.
- An account owner who is a Utah taxpayer must pay Utah state income tax on the earnings portion of a nonqualified withdrawal in addition to paying federal income tax and penalties. The Utah account owner must also add back the amount of the nonqualified withdrawal as income on their Utah state income tax form for the taxable year the nonqualified withdrawal was made. (If contributions were made for the current or a prior year and the taxpayer did not receive a my529 credit, no addback is required for a nonqualified withdrawal.)
- Consult with your tax advisor about what constitutes a qualified withdrawal.
If your beneficiary decides not to go to college
You can transfer the funds in your account to another beneficiary who is a member of the previous beneficiary’s family.
Read the Program Description for more information.