I know that there have been several threads that have come and gone and gone on this site and I apologize for starting another one. However, I was not really able to find an answer to this question and have doing many searches on the internet, including the IRS site, I still can’t find a definitive yes or no to this question.
My son is currently a Freshman living in a dorm that requires a meal plan. My understanding is that under this situation, I can use 529 money to pay for his meals. However, he very much would like to move into “off campus” housing next year and I thought that I did read somewhere at some point that we would not be able to use 529 money to pay for any meals that were not part of a required meal plan. Can anyone confirm this (or hopefully tell me that this is not true!)?
No, you can use 529 money for room and board. You can either use the actual costs (saving receipts) or use the amount allowed in the COA.
So, does the definition of room and board include meals or meal plans? Sorry, was not sure what you meant by “No”.
Room and board includes dorm rooms, off-campus apartments, college meal plans, food from a grocery store, etc. Basically, any expense for housing and sustenance.
What twoinanddone wrote is not quite accurate. This is from IRS Pub 970:
*Expenses for room and board must be incurred by students who are enrolled at least half-time. The expense for room and board qualifies only to the extent that it isn’t more than the greater of the following two amounts.
a. The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
b. The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.*
https://www.irs.gov/pub/irs-pdf/p970.pdf (see pg. 59)
Thanks for info. This sound good. I did read that same info somewhere, but didn’t realize that “board” included meals. So, just to clarify, here is an example…please let me know if I’m correct (for my full time student).
College’s stated cost of room and board is $8,365
Student wants to live in an off campus apartment that cost $6,000 for a school year. That would mean that he could spend an additional $2,365 on food or other “room and board” related items, including meals, and still use 529 money to pay for it…correct??
Board is the food part.
And yes…your example above is correct…unless the college specifically itemizes out the board part. In other words…you can only spend what the college allocates for Board (meals).
The COA might have a different allowance for off campus room and board than on campus
The word board means meals. Ergo, room and board means a room to sleep in plus meals. It comes from the idea of a table. In old English, board was the word for table, and you’ll still find related words in use in other languages. I think bord means table in Danish and Swedish. Also, there’s the word smorgasbord.
@therealtomrose thanks for the advice, but I don’t really agree with your suggestion. I think we have enough to cover about 7 of the 8 semester’s, assuming he graduates in 4 years. The “extra time to grow” is a bit irrelevant as, at this point, We have the majority of the money in a very low risk investment (basically cash and a small portion in bonds). It would be unwise to keep your money in any high risk “growth” type investment once your son/daughter is already in college (or even in his/her later years of high school). Especially considering that the markets are just off their all time highs. We gradually moved our 529 money to lower risk investments as our kid got older.
Although, I guess your thought process might make some sense if you only think you have enough to cover 50% or less of your kid’s college.
Your 529 also covers books, supplies, and required technology products and services. That could include internet service, computers, software, etc.
Only books and supplies that are specifically required for the class. For instance, notebooks and pens or pencils are likely not a 529 qualified expense.