What are NC 529 eligible expenses?
Essentially, a 529 eligible expense is something needed for school and education, while non-qualified expenses wouldn’t be necessary to complete a degree or certificate. Understanding the difference is important when considering making a withdrawal.
NC 529 eligible expenses include all of the following:
College expenses, including tuition, books, fees, room and board, a computer, and more.
Trade school expenses, as long as they are on the Federal Student Aid list.
Apprenticeship program expenses for programs registered with the U.S. Department of Labor or State Apprenticeship Agency.
K-12 tuition expenses up to $10,000 of 529 funds per year, per child.
Special needs equipment.
Student loan payments on behalf of the beneficiary or beneficiary’s siblings up to $10,000 per individual.
Rollovers of excess NC 529 funds to your beneficiary’s Roth IRA for their retirement.
*Certain criteria apply.
529 eligible expenses FAQs
Once the NC 529 Account has been open for at least 60 days, an account holder can withdraw funds at any time. The quickest way to make a withdrawal will be to use our website. Simply sign in to your account and follow the steps for a non-qualified withdrawal. You can also download and complete a Request for Withdrawal and email, mail, or fax it to the NC 529 Plan. Note that you will also be responsible for taxes and penalties for the non-qualified withdrawal.
To avoid penalties and tax fees, make sure the savings and earnings you withdraw are used for qualified education expenses. Generally, qualified education expenses are those that explicitly serve an educational purpose. If you’re unsure if a potential expense related to your education is considered an NC 529 eligible expense, read more on the difference between qualified and non-qualified expenses.
One of the benefits of investing in a 529 program is the tax-free earnings. The money you save in an NC 529 Account may grow over time and any earnings are free from federal and state income tax when they are withdrawn and used for Qualified Education Expenses (QEE).