Can your 529 pay for it? Check tuition, room and board, laptops, K-12, and loan payments
| Include | Expense | Amount ($) | Status |
|---|
| Expense | Qualified? | The Rule That Matters |
|---|---|---|
| College tuition & required fees | Yes | Any eligible degree or credential program, any enrollment level |
| Required books & supplies | Yes | Must be required for an enrolled course |
| Computer, software, internet | Yes (college) | Used primarily by the beneficiary while enrolled; not allowed for K-12 |
| Room & board | Yes, with caps | Half-time enrollment; limited to actual school charge or COA allowance, whichever is larger |
| Off-campus rent & groceries | Up to allowance | Only up to the school's room & board allowance; the excess is non-qualified |
| K-12 tuition | Capped | $10,000/yr through 2025; $20,000/yr from 2026 (OBBBA). Tuition only |
| Student loan repayment | Capped | $10,000 lifetime per borrower; each sibling gets a separate $10,000 |
| Credentialing exams & licenses | Capped | $10,000 lifetime, for credentials recognized post-July 4, 2025 |
| Health insurance | No | Not qualified at any enrollment level |
| Transportation, parking, commuting | No | Never qualified, even to get to class |
| Sports, clubs, fraternity/sorority | No | Extracurricular activity fees are out |
Rules from IRS Publication 970, the SECURE Act (2019), and the One Big Beautiful Bill Act (July 2025). A handful of states, California included, do not follow the federal K-12 expansion for state tax purposes, so check your plan's state before relying on it.
A 529 plan grows tax-deferred and comes out tax-free, but only for qualified education expenses. Withdraw earnings for anything else and the IRS taxes the earnings as ordinary income and adds a 10% penalty. The tricky part is that the rules are full of conditions and dollar caps: room and board depends on enrollment level, off-campus housing depends on the school's cost-of-attendance allowance, and three separate categories carry $10,000 limits. This checker applies each rule to the items you check and splits your spending into what can come out tax-free and what can't.
Only the earnings portion of a non-qualified withdrawal is penalized. If an account is 40% earnings and 60% contributions, a $1,000 non-qualified withdrawal contains $400 of earnings. At a 22% marginal rate, that's $88 of income tax plus $40 of penalty, $128 total, while the $600 of contributions comes back untouched. The calculator multiplies your non-qualified total by your earnings share, then by your marginal rate plus 10%.
Set the enrollment level first, because it changes the room and board answer. Enter the room and board allowance from your school's published cost of attendance, which is the cap for off-campus housing. Check each expense you're planning, and read the status note on capped items. The penalty panel only matters if you intend to withdraw more than the qualified total.
A half-time sophomore bills $9,500 of tuition and fees, $420 of required textbooks, a $900 laptop, and $6,200 of on-campus room and board. All four are qualified: $17,020 total. Her parents also want to cover a $10,800 off-campus rent and food budget against the school's $9,000 allowance ($1,800 over), $900 of parking and commuting, and the $1,400 student health plan. Only the $9,000 allowance portion of the rent counts; the other $4,100 is non-qualified.
If they withdraw the full $30,120 anyway and the account is 40% earnings, the earnings on the non-qualified share are $1,640. At her parents' 22% rate, that's $361 of income tax plus a $164 penalty, about $525 lost to the mistake. Cheaper options: pay the extras from cash and save the 529 for a future semester, or route up to $10,000 lifetime to her student loans after graduation.
Yes, if the student is enrolled at least half-time. The withdrawal is limited to the school's actual housing and meal charge or the room and board allowance in its cost of attendance, whichever is larger. Off-campus rent and groceries count only up to that allowance, so anything above it is a non-qualified withdrawal.
Yes, for higher education. Computers, peripheral equipment, educational software, and internet access are qualified expenses as long as they're used primarily by the beneficiary while enrolled. The exception is K-12: for kindergarten through high school, 529 money covers tuition only, not laptops or supplies.
Yes, up to $10,000 per beneficiary per year through 2025. The One Big Beautiful Bill Act (July 2025) doubled the cap to $20,000 per year starting with distributions in 2026. Note that several states, including California, have not conformed and tax these withdrawals at the state level.
Yes. The SECURE Act allows up to $10,000 lifetime in qualified student loan repayments per beneficiary, and a separate $10,000 lifetime for each sibling of the beneficiary. Only principal and interest on a qualified education loan count.
The earnings portion of the withdrawal (not the whole amount) is taxed as ordinary income plus a 10% federal penalty. Your contributions always come out tax-free. So a $4,100 non-qualified withdrawal from an account that is 40% earnings costs about $525 in tax and penalty at a 22% marginal rate.
Parent-owned 529 withdrawals used for college are not counted as income on the FAFSA, which is why spending them in the right years matters. A common strategy is to defer qualified expenses like a spring tuition bill into January so the withdrawal lands in the same tax year as the bill.
This checker summarizes federal rules from IRS Publication 970 and related legislation for planning purposes. It is general information, not tax or legal advice. State treatment varies and plan administrators apply the rules to your specific facts, so confirm with a tax professional before making withdrawals.