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How do I withdraw funds to pay for college?

If you have had your 529 account for over 90 days then you can take a withdrawal. In your college fund details page, select “make a withdrawal.” You can choose to transfer the funds to your bank account, the beneficiary, or to the school. You'll receive an IRS Form 1099-Q at the end of the year, which will break out the basis portion and the earning portion of your withdrawal.

Please note that there are tax consequences if you do not use the withdrawn funds for qualified education expenses. For a non-qualified withdrawal (where you are making a withdrawal but not using the funds for qualified higher education expenses), the earnings portion of the investment will be subject to income tax and a 10% penalty. The basis portion will never be taxed or subject to a penalty because it is made up of the amount you originally contributed with post-tax dollars.

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