A 529 isn’t limited to just paying undergraduate tuition expenses. It can also be used to pay for other college-related expenses, including dorm fees and books. If the scholarship covers all expenses, then you can change the beneficiary of the account or withdraw the money for a different purpose. However, if you choose to withdraw the money and use it for something else, a 10% penalty and tax will apply to the earnings portion of the investment.
What happens if my child receives a scholarship to school?
Articles in this section
- What can I pay for with a 529 plan?
- Can I only use my 529 savings for college?
- How do I withdraw 529 savings funds?
- I made a withdrawal. Where can I find my tax form?
- What happens if my child receives a scholarship to school?
- Will investing in a 529 plan through Backer impact my child’s financial aid eligibility?
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