<p>I paid my son's 2010-11 tuition in 2010. Can I take money out of our 529 plan now, in 2011, to cover these expenses or would I have had to take it out in 2010? I can't find anything that says you have to withdraw the money from a 529 plan in the same tax year you pay it.</p>
<p>As I understand it, yes, you must take the distributions in the same calendar year as the cost was incurred. I suppose there may be some interpretation that could be argued, that the amount specifically applicable to the spring term (now, early 2011) that was paid in advance in 2010 could be withdrawn in 2011… not sure how that argument would hold up.</p>
<p>Does the school bill for the whole year in advance? I know both my kids’ colleges break the billling up by term.</p>
<p>You need to be careful to match up payments with withdrawals in the same calendar year.</p>
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<p>[Avoid</a> these 529 withdrawal traps](<a href=“6 Top 529 Withdrawal Mistakes to Avoid”>6 Top 529 Withdrawal Mistakes to Avoid)</p>
<p>we have been told (by our accountant) that you can avoid this problem if you pay the school directly from the 529; that way your billing statement reflects the payment from the 529 even if they don’t match up with the calendar year…It will match up with the tuition bill from the school, therefore not causing a credit balance on the account…</p>
<p>that is enough documentation for the IRS…</p>
<p>as an example, you are billed for Spring 2011 in Fall 2010; your bill from the school reflects that; offset with a direct payment from the 529…no harm, no foul</p>
<p>if there is an accountant on CC who knows differently, please let us know…</p>