What qualifies for 529a expenses under educational housing and living costs?

Thanks for the info! My school's cost of attendance lists $14,500 for off-campus housing for the academic year. Does this mean I can use my 529 funds for any housing/food expenses up to that amount? Also, what documentation should I keep for these expenses to avoid problems if audited?

Yes, you can use your 529 funds for housing and food expenses up to that $14,500 limit set by your school. This amount represents the total for both categories combined, not separate limits for each. I strongly recommend keeping detailed records of all your expenses. Save rent receipts, utility bills, grocery receipts, and any other housing or food-related costs. For maximum protection, consider having separate credit cards or accounts specifically for qualified expenses to make tracking easier. Also, save your school's official cost of attendance documentation that shows the $14,500 allowance for your records.

How accurate is this tool really? I've heard horror stories about people getting audited and having to pay back taxes plus penalties because they misused 529 funds based on incorrect advice.

Does it work for ABLE accounts too? My brother has a 529A and we're constantly confused about what expenses qualify for his disability-related needs versus education expenses.

The accuracy has been excellent in my experience. It uses the official IRS guidelines and your specific school's published cost of attendance figures to make determinations. I double-checked some of its recommendations with my school's financial aid office, and they matched perfectly. What I especially appreciated was how it explained the "why" behind each determination, referencing specific IRS publications. Yes, it absolutely works for ABLE accounts (529A) as well. The tool specifically asks which type of account you're dealing with at the beginning of the process. ABLE accounts actually have more flexibility for qualified expenses than traditional 529 plans since they can cover education, housing, transportation, healthcare, and other disability-related expenses. The tool breaks down all these categories clearly.

This sounds too good to be true. The IRS actually answered specific questions about what counts as qualified 529 expenses? I thought they never give definitive answers on gray area questions.

How much does this service cost? Seems like it might be worth it just to avoid the frustration of being on hold forever, but not if it's super expensive.

They absolutely did provide specific guidance! The key was that I got connected to an education account specialist rather than a general IRS agent. This person had specific training on 529 plans and was able to address my questions about utilities, security systems, and even internet service as they related to off-campus housing. They referenced specific IRS publications and explained how those rules applied to my situation. I don't want to focus on the exact cost since pricing could change, but I found it extremely reasonable considering the time it saved me and the value of getting definitive answers. For me, the peace of mind was worth every penny - knowing I wasn't going to face penalties for misusing the 529 funds made it a no-brainer. You can check their website for current pricing, but I'd say it's less than what you'd pay for an hour with most tax professionals.

That timing tip is super helpful - I wouldn't have thought about the calendar year issue! Does your school's financial aid office provide that breakdown document automatically, or did you have to specifically request it?

Most schools don't provide the detailed breakdown automatically - you typically need to request it specifically. Ask for the "detailed cost of attendance breakdown" or "off-campus living allowance itemization." Some schools have it posted on their financial aid website, but often it's only available by request. The timing issue is really critical - I ended up having to reclassify about $2,000 as non-qualified distributions and pay taxes plus a 10% penalty because I didn't understand the calendar year rule. The IRS is very strict about matching the year of withdrawal with the year the qualified expense is paid. If you're paying January 2026 rent in December 2025, you should take the 529 withdrawal in 2025, not 2026.

Yes, computers, software, and related technology are qualified 529 expenses IF they're used primarily for educational purposes during your enrollment. This was officially added to the qualified expense list in 2015 with the PATH Act. Just make sure you keep documentation showing the technology is required or recommended by your program, or at minimum, demonstrate how it's necessary for your coursework. Save the purchase receipts and any emails or documents from your school mentioning technology requirements.

Thanks! That's a relief. My program actually sent us a detailed "required technology specifications" document, so I'll definitely save that along with my purchase receipts. Good to know the PATH Act explicitly added this - gives me more confidence when using my 529 funds for these purchases.

This is really helpful information about the half-time enrollment requirement! I hadn't considered that aspect. Quick question - does "half-time" have a specific credit hour definition, or does it vary by school? My program has some flexibility in course load, so I want to make sure I stay above whatever threshold is required. Also, regarding the security system expense, you're probably right about being conservative. I think I'll skip using 529 funds for that and stick to the clearly qualifying expenses like rent and utilities. Better safe than sorry when it comes to potential penalties. The meal expense guidance is spot on too. I'll track my food spending monthly and compare it to my school's published meal plan costs to make sure I'm staying reasonable. Thanks for the practical advice!