Can I Use a 529 to Pay for High School Computer?

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future educational expenses. These plans are typically sponsored by states and offer various benefits, including tax-free growth and withdrawals when funds are used for qualified education expenses. Qualified expenses generally include tuition, fees, books, supplies, and equipment required for enrollment or attendance at eligible educational institutions.

Using 529 Funds for High School Expenses

Traditionally, 529 plans were intended for post-secondary education expenses. However, recent legislative changes have expanded their use to cover certain K–12 expenses, including tuition. Specifically, the Tax Cuts and Jobs Act allows 529 plan withdrawals of up to $10,000 per year per beneficiary for tuition expenses at public, private, or religious elementary or secondary schools.

Can 529 Funds Be Used for High School Computers?

When it comes to purchasing a computer for high school, the answer is nuanced. According to IRS guidelines, 529 plan funds can be used to purchase a computer, peripheral equipment (like a mouse or speakers), computer software, or internet access, provided that the beneficiary primarily uses these items while enrolled at an eligible institution.

However, it’s important to note that if the high school is not an eligible institution (i.e., it doesn’t provide post-secondary education or isn’t recognized by the Department of Education), using 529 funds for a computer may not qualify as a tax-free expense. Therefore, before making such a purchase, confirm that the high school meets the criteria set by the IRS for eligible institutions.

Best Practices for Using 529 Funds for Computers

1. Confirm Eligibility: Ensure that the high school is an eligible institution under IRS guidelines.
2. Keep Detailed Records: Maintain receipts and documentation showing that the computer and related equipment are primarily used for educational purposes.
3. Consult a Tax Professional: Before making significant expenditures, it’s wise to consult with a tax advisor to ensure compliance with current regulations and to maximize the benefits of your 529 plan.

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