<p>RE: 529 Savings Plan qualified distribution
Does UIUC consider the purchase of a personal computer a "Qualified Educational Expense"? In reading the general material for 529 plans, it states that a personal computer will qualify as an educational expense only if the school requires it. Well, I'm pretty sure that most of the students have computers and it would be a major inconvenience to the student if they did not have one (research, homework, reports, e-mail, etc.....). If books and supplies are considered a qualified educational expense, shouldn't computers also be?</p>
<p>UIUC does not require anyone to have a computer. However, you should check with a tax accountant to determine whether the computer expense qualifies as a 529 expense under the circumstances (under your description it sounds like it may not but you should still check). The issue is not whether UIUC would consider something a "Qualified Educational Expense" under the 529 plan but whether tax authorities will under the circumstances.</p>
<p>According to my representative from Fidelity, which administers our 529, purchasing a computer for the student is considered a qualified expense. You need to keep your receipts, though, and show on your tax return that the funds were spent that way.</p>
<p>Fidelity also administers our 529 and they just told me that it is up to each state whether they will allow personal computers as a "qualified educational expense". They told me to check with a tax person, so I will be calling my accountant. Such a big deal! - nowadays, its practically a given that 99% of students have a computer.</p>
<p>Ah, I may have gotten a different answer because both I and Fidelity are domiciled in Massachusetts! Of course, checking with your accountant is far safer than relying on anything on the web.</p>
<p>I agree essentially all need a computer in college but the one thing we all learn over the years is that logic (and common sense) in relation to any tax laws are diametrically opposed.</p>