Update: New Perks For College 529 Plans Will Make Life Sweeter For Parents

college parents

Parents with 529 plans are definitely smiling. Now they can use the funds to pay for computers and other expenses.

New legislation has made life a little bit sweeter for parents of college students.

Computers and related equipment now qualify as higher education expenses, meaning parents can tap college 529 plans to pay for them.

As the parent of one child still in college, I can definitely appreciate that. Many kids, especially those in engineering or other technical majors, require some pretty pricey equipment, and after a few years of all-nighters and dorm living, those laptops can really take a beating.

Here’s what you need to know about the new rules:

  • Congress approved the change December 18 as part of the Protecting Americans from Tax Hikes, or PATH, Act (who comes up with these names, anyway?).
  • Previously, 529 college funds could be used for computers only if the beneficiary’s college required them as a condition of enrollment or attendance.
  • Now, computer equipment and related hardware qualify even if they are not specifically required by the university, college, or technical school the beneficiary attends. Frankly, it’s about time! How many students do you know who can get through college without a laptop, required or not?
  • Qualified higher education expenses, which can now be covered under a 529 plan, include computers, laptops, printers, internet access, and computer software related to a beneficiary’s studies and used primarily by the beneficiary while enrolled in school.
  • Sorry! Expenses for computer software designed for sports, games, or hobbies is generally excluded, unless the software is predominantly educational in nature.

 

 

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

Subscribe to our updates

Stay informed about financial planning and investing issues that impact your life today AND tomorrow! (we respect your privacy)

,

No comments yet.

Leave a Reply