529 expenses

Discussion in 'Merchant Marine Academy - USMMA' started by bigJ, Apr 25, 2018.

  1. bigJ

    bigJ Member

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    Hi, I understand that money from a 529 account can be used to buy school supplies, as well as pay for tuition room and board. Does anyone know if it is kosher for money from these accounts to be used to pay for the clothing and supplies needed for Sea Year?

    Thanks
     
  2. AROTC-dad

    AROTC-dad Moderator

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    Unlike USMA, USAFA and USNA, the U.S. Merchant Marine Academy is considered by the IRS as an eligible institution to qualify for 529 funds.
    Source:
    https://www.irs.gov/credits-deducti...d-income-tax-credit/eligible-educational-inst

    USMMA has a page dedicated to 529 plans:
    https://www.usmma.edu/admissions/financial-aid/scholarships

    So as long as you use the funds for qualified higher education expenses (QHEE) which include the following, you should be okay. The clothing and supplies must be REQUIRED for USMMA sea year to qualify as QHEE.

    For more IRS info:
    https://www.irs.gov/newsroom/529-plans-questions-and-answers
     
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  3. bigJ

    bigJ Member

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    Thanks, I'm unsure what is actually 'required' vs what is 'highly recommended'. I have lists from the academy on what to bring....does that mean they are required?
     
  4. AROTC-dad

    AROTC-dad Moderator

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    I would use the 529 money on what is considered "required."

    For example, the IRS would likely have no problem paying for a lab coat that is required for Chemistry lab, but they would certainly balk at using the funds for a private tutor for that same chem lab class.

    Optional items would likely be denied if you were ever audited by the IRS.
    Ask your advisor what would be deemed "required" and explain that you are using 529 plan funds accordingly.
     
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  5. cousmma5280

    cousmma5280 Member

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    FYI. . .
     
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  6. vortexkp99

    vortexkp99 Member

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    Yes...from my observations 529 is authorized....

    Also, if your family has it, you can use the post 911 education bill, but the return on investment is a lot lower given the federal government already pays for most.

    Layman opinion here..I am not an expert.