TaxWatch: My daughter has her heart set on attending a Canadian college. Will my 529 account still receive the tax benefits?

1 week ago 63

My daughter is considering a Canadian school for her Bachelor’s degree. The school is on the U.S. Department of Education’s website as a “deferment only” school, which means a student cannot get new federal loans while at this school. But if she has existing loans, they can be deferred while she goes to this school.

We have 529 plans for my daughter. If we withdraw from the 529 and pay tuition and room and board at this school, will this be considered a qualified withdrawal? Or will we have to pay taxes on the withdrawal and a 10% penalty on the earnings?

Flummoxed on college financing

Dear Flummoxed,

Your question jumped out to me at a time when higher education costs are in the news.

The Supreme Court recently heard arguments on the B...

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