Using 529 money

U

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Wrong forum for this obviously but I felt like posting anonymously.

I have moderately funded 529 education accounts for my kids. Looks like we won't need to use a lot of that money because the kids have earned substantial (read: full) merit scholarships. I know that if I withdraw those funds for non-educational expenses, the earnings become taxable and there's an additional percentage penalty. I also know that all those funds can easily be transferred to whichever family member I wish.

Question: Can I use that money for additional flight training (e.g. multi ratings, advanced instructor ratings) for myself? Part 141 flight school? Anything?

Anyone know? Not the worst problem in the world to have I know, but I was wondering.
 
Unregistered said:
Wrong forum for this obviously but I felt like posting anonymously.

I have moderately funded 529 education accounts for my kids. Looks like we won't need to use a lot of that money because the kids have earned substantial (read: full) merit scholarships. I know that if I withdraw those funds for non-educational expenses, the earnings become taxable and there's an additional percentage penalty. I also know that all those funds can easily be transferred to whichever family member I wish.

Question: Can I use that money for additional flight training (e.g. multi ratings, advanced instructor ratings) for myself? Part 141 flight school? Anything?

Anyone know? Not the worst problem in the world to have I know, but I was wondering.
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Pretty sure you can use it for any of their educational expenses. Even with a full merit scholarship there are still books, room and board, and other fees (probably).

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Qualified education expenses.https://www.irs.gov/publications/p970/ch08.htmlhttps://www.irs.gov/publications/p970/ch08.html These are expenses related to enrollment or attendance at an Eligible educational institution (defined later).
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Eligible educational institution.https://www.irs.gov/publications/p970/ch08.htmlhttps://www.irs.gov/publications/p970/ch08.html For purposes of a QTP, this is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. The educational institution should be able to tell you if it is an eligible educational institution. Certain educational institutions located outside the United States also participate in the U.S. Department of Education's Federal Student Aid (FSA) programs.
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https://www.irs.gov/publications/p970/ch08.html
 
Matthew said:
Pretty sure you can use it for any of their educational expenses. Even with a full merit scholarship there are still books, room and board, and other fees (probably).
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Absolutely. We're doing that. Still a bunch gonna be left over.

Thanks for the necessary legal wording. If I ever contact a flight school, I'll know the questions to ask.
 
Can't answer your question but with twin boys who are seniors in high school, I envy your position! :) Congratulations.
 
Sam D said:
Can't answer your question but with twin boys who are seniors in high school, I envy your position! :) Congratulations.
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Trust me, we do NOT take this for granted. Great kids, worked their ***es off.
 
Unregistered said:
Absolutely. We're doing that. Still a bunch gonna be left over.

Thanks for the necessary legal wording. If I ever contact a flight school, I'll know the questions to ask.
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Leftovers can stay in the account. Take a couple of classes yourself somewhere down the line.
 
Unregistered said:
Well, yeah, that's what I was asking. Can those "classes" be flight training?
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By "classes" I meant at a local community college or someplace.

For flight training - maybe? If it's a 141 school that meets the criteria listed in the IRS document, then probably so.

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The educational institution should be able to tell you if it is an eligible educational institution.
<<<
 
I recently won some scholarship money and I formally enrolled in a community college aviation course. The part 141 schools I contacted said they weren't eligible educational institutions although they can accept VA benefits (VA and Dept. of Education aren't always on the same page).
 
In case of a scholarship you can withdraw the funds without paying the 10% penalty. It's a really good outcome.

I don't know how soon you must withdraw it in that case.
 
NoHeat said:
In case of a scholarship you can withdraw the funds without paying the 10% penalty. It's a really good outcome.
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Actually, I was doing some looking online and just this minute discovered this very fact. Sure, worst case, I'll have to pay tax on the interest, but there won't be any penalty because of the amounts of the scholarships.
 
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