What are the withdrawal rules for a 529 plan?
An example of an AI chatbot conversation about 529 plan withdrawal rules.
What are the withdrawal rules for a 529 plan?
Withdrawals from a 529 plan can be used tax-free for qualified education expenses, like tuition and books.
Are there penalties for non-qualified withdrawals?
Yes, non-qualified withdrawals may incur a 10% penalty on earnings, plus income tax on the earnings.
Can I use the funds for K-12 education?
Yes, you can use up to $10,000 per year for K-12 tuition expenses without penalties.
What happens if I don't use all the money?
If you don't use all the money, you can change the beneficiary or withdraw the funds, but taxes and penalties may apply.
Is there a time limit to use the funds?
There is no time limit to use the funds, but it's best to use them for qualified expenses to avoid penalties.
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