D partial meal plan allows 12 meals per week plus money loaded on debit card by University, which can be used at some off campus restaurants and on campus fast food… A specified part of the debit card funds can be used for laundry and photocopies. Some eating will be done at off campus restaurants not covered by university debit card using personal funds, plus groceries she will buy and have in dorm. And, the unused debit card funds carry over each semester and year until graduation.
For first semester when she was on an unlimited meal plan, I just used the entire meal plan amount as 529 qualified expenses and didn’t keep up with any outside meals not covered by meal plan since I figured that was over the COA food amount and wouldn’t be allowed for 529 reimbursement anyway. Now with partial meal plan, I’m not quite sure how much I can withdraw from 529 as a qualified expense.
Do I need to keep up with each meal debit on debit card account and total for qualified of allowed 529 expenses, or just use the entire meal plan amount that includes the debit card amount? So far D hasn't used any of the specified amount for laundry or copies.
For allowed withdrawals from 529, can I use the total of the meal plan amount (considering answer to #1 above) plus any restaurant and grocery charges up to the amount of full meal plan COA? I will try to impress upon her that I will need every receipt for every food-related transaction.
I don’t think that you need to worry about getting every receipt. Find out what the school’s COA is and look at the room and board component of that. This will not necessarily be what you are paying for the 12 meals per week plan; it will probably be closer to (if not the same as) room plus the unlimited meal plan that your daughter had first semester. For 529 withdrawals, you can use the higher of the published COA for room and board amount or the amount that the school actually charged, if the student is in housing owned or operated by the school.
I did the math. COA for Housing and Meals on-campus is 8290 or 4145 per semester (since 529 withdrawals can only be made in the year that bill is paid–one in August 2014 and one in Jan 2015). First semester Housing and Meals (unlimited meals) was 4970, which is what I withdrew from 529. For second semester, University charged 4766 for partial meal plan of 12 meals and housing, which is much higher than the COA of 4145. So there will be additional costs for food. Do I just have to “eat” (pun intended) all the extra costs because their published COA is so low?!
That does seem like a very low COA for both on-campus housing and meals. It’s also strange to me that the difference between unlimited meals and 12 meals per week is only about $200 per semester. It sounds like the unlimited meal plan takers are being subsidized by those who elect a lesser meal plan. In any event, the IRS rules are clear: you can only count as QEE the higher of published COA or what the school actually charges for room and board.