Tuesday, September 22, 2009

More Help With College Expenses

by Jill Boynton
posted by Jameel Murray

As part of the American Recovery and Reinvestment Act of 2009, computer equipment and technology has been added to the list of qualified expenses that are eligible to be paid from money in a 529 plan. For the years 2009 and 2010, the cost of purchasing any computer technology, equipment or internet access and related services are approved expenses.

529 plans are used to save money for college tuition, room and board and other expenses. When used for a qualified expense, withdrawals from a 529 plan account are tax free.

The IRS said covered computer and related peripheral equipment includes any supporting equipment designed to be placed under the control of the computer, such as a printer. Education software also qualifies although computer games do not, unless educational in nature. The beneficiary must use the item while enrolled in an eligible educational institution.

Be aware however that expenses for computer technology are not qualified expenses for the American Opportunity credit, Hope credit,Lifetime Learning credit, or tuition and fees deduction.

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