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- 529 distribution for study abroad, are earnings taxed ?
529 distribution for study abroad, are earnings taxed ?
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Melathome
Level 2
04-11-2024
06:18 PM
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Client withdrew 529 plan money for dependent child to attend university in Europe. My understanding is you can use 529 plan funds to pay for qualified expenses if the study program at the foreign school is 1) eligible for credit at the student's US home institution, and 2) if the foreign institution is eligible for federal student aid.
This school has a code on the FAFSA list but the dependent is not associated with any US college, its just her foreign school of choice. No 1098-T received. Are the earnings on the distribution taxable ? Pub 970 doesn't really address the first requirement. Thanks.
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Terry53029
Level 14
04-13-2024
08:56 AM
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I would say yes. See link under general definition of institution of higher education
https://www.govinfo.gov/content/pkg/COMPS-765/pdf/COMPS-765.pdf
