WebMar 28, 2024 · Plus, funds in a 529 plan can be used to pay off up to $10,000 of the student loans. Non-qualified withdrawals, however, have tax consequences and need to be reported. If the money withdrawn isn’t used for qualified educational expenses, the earnings are considered taxable income and need to be reported on state and federal tax returns. WebA 529 plan is an investment account that’s mainly used to pay for college and other educational expenses. You can also use 529 plan funds to pay off student loans, thanks to a law that was signed in 2024. More specifically, you’re allowed to use up to $10,000 per beneficiary on student loan repayment.

529 Plan FAQ - Paying for College - Fidelity

WebApr 12, 2024 · Student loan repayments: Starting in 2024, 529 plan funds can be used to pay off up to $10,000 of qualified student loan debt for the beneficiary and $10,000 for … WebDec 9, 2024 · Can you use a 529 plan for student loans? Previously, account holders couldn’t use their 529 plans to repay student loans without incurring income taxes and penalties. However, the … birthsupport

How to Withdraw Money From a 529 College Savings Plan

WebMoney from a 529 account must be used for qualified education expenses to avoid taxes and penalties. But in addition to college expenses, you can also spend up to $10,000 … WebEach additional hour is $299. Connect with a live college planning expert, on demand! Avoid costly mistakes in financial aid forms and school selection. Know how and when to appeal for more money and avoid needless debt. Visit our Tech page for full details! WebJul 17, 2024 · There are several options for using retirement plans to pay for college, including early distributions from an IRA, using a tax-free return of contributions from a Roth IRA, loans from a 401 (k) or 403 (b) plan and hardship distributions from a 401 (k) or 403 (b) plan. Early Distributions from an IRA birth support education and beyond