529(e)(3)(A) defines QHEEs to include tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution. A 10% additional tax generally applies to amounts subject to tax under this rule. To the extent distributions exceed the designated beneficiary’s QHEEs, a portion of the distribution is included in gross income. 529(c)(3) provides that distributions (including any attributable earnings) from a 529 plan are not included in gross income if such distributions do not exceed the designated beneficiary’s QHEEs. These programs are collectively referred to as 529 plans. In addition, an eligible educational institution may establish or maintain a program that permits a person to prepay a designated beneficiary’s QHEEs. 529, a State or its agency or instrumentality may establish or maintain a program that permits a person to prepay or contribute to an account for a designated beneficiary’s QHEEs. 529 qualified tuition programs (529 plans): a) recontribution of refunded qualified higher education expenses (QHEEs) b) rollover from a 529 plan to an ABLE account and c) elementary and secondary education tuition expenses as QHEEs.īackground. In a Notice and accompanying Information Release, IRS has issued guidance, and announced its intention to issue regs, regarding the following aspects of Code Sec.
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