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Alanis is the beneficiary of a Section 5 2 9 plan. In 2 0 2 4 , a distribution was used to pay for her
Alanis is the beneficiary of a Section plan. In a distribution was used to pay for her enrollment at a qualifying educational institution. However, early in the semester, Alanis decided to drop out of school. She received a full refund of her tuition.
Income taxes and penalties on the taxable portion of this distribution may be avoided by:
Using the amount toward qualifying education expenses within the next two calendar years.
Demonstrating that her annual health care costs exceeded the total amount of the distribution.
Contributing the distributed amounts to a taxfavored retirement plan, such as an IRA.
Recontributing the distributed amount within days.
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