Many schools have adopted social distancing guidelines in response to the COVID-19 pandemic, moving classes online or canceling them altogether. As a result, schools are partially or wholly refunding tuition costs for classes.
If you’ve received a refund on tuition paid for with funds from a 529 College Savings Plan, there may be tax implications if the funds are not managed correctly. A 529 plan recontribution is a good way to avoid a taxable event, but there are a few steps you’ll need to take to ensure the refund is recontributed correctly.
In this white paper, we explain...
How 529 College Savings Plans work
The difference between qualifying and non-qualifying distributions
How tuition refunds can trigger a taxable event
How to properly recontribute a tuition refund to a 529 Plan