Are music lessons billed by the school and paid for with a 529 be considered a qualified withdrawal

A little off topic for this forum, but I do value the wealth of knowledge around here. My son is doing a double major with music as one of the majors. He is taking cello lessons from the cello professor that are billed through the school and therefore appear on his bill with all his other costs. One semester he took the lessons and received school credit and another semester he took lessons and did not receive school credit.

I had posted a similar question in the past concerning the music lessons he took for credit. At the time it was suggested that 529 withdrawals for the lessons he took for credit, as I expected, would be considered a qualified withdrawal. As he is now not taking them for credit but still billed through the school, would 529 withdrawals for those lessons be considered a qualified withdrawal?

If he is a double major in music…why aren’t his lessons for credit (asking as my kid was a music major Andy lessons were required and were for credit. Second kid took lessons also as a non-major and hers also were for credit).

Why doesn’t he just take the lessons for credit?

My inclination is that only the lessons for which he receives school credit are 529 qualified expenses. Depending on the specific rules of the 529 plan, you can probably still use 529 funds for the other (non-credit) lessons, but since this is not a qualified expense there will be income tax owed on the earnings portion of the 529 distribution, and likely also a 10% additional tax.

I believe he has the option as to whether to take them for credit or not. Not sure why he doesn’t take them for credit. Perhaps he maxed out on other credits. I know he has more than enough extra credits, so he does not need the credits. Maybe it’s cheaper if you don’t take them for credit?? I will ask him when I get a chance.

My S sometimes took some of his music classes not for credit such as studio class because as a double major he was at the max credits he was allowed to register for for that particular semester and he didn’t need the credits towards either degree.

Can you pull 529 money from the accounts without penalty because of scholarship money paying tuition?

The 10% additional tax “penalty” could be avoided, but the earnings portion of any non-qualified distribution will still be assessed as ordinary income for income tax purposes.

As it turns out, my son did take all the lessons for credit. At one point, he was considering not taking it for credit one semester because he was going to max out the number of credits he could take. So, I think I’m good as far as qualified withdrawals. Hopefully, if someone else has the question, at least they have an opinion in here.

Thanks