Hi - I am a resident of DC who is taking non degree classes for credit at a local university. I just start reading up on the DC 529 plan and my question is as follows: I have taken 1 class and will be taking another class in fall - each class tuition was around $4000. Can I open a 529, deposit 8000 dollars, then withdraw everything at the end of the year and close the account. Is that allowed - basically, then I could take the state tax deduction and all distributions are tax free. Am I reading this correctly ? What am I missing here ? I realize of course that theres not much time for the money to grow but I am interested mostly in taking the tax deduction since the tuition is something I have to pay in any case. Also, does it matter that I paid off half the tuition prior to even opening the 529. I would appreciate any thoughts/advice on this. thanks in advance !
In many places such an in /out does work for state tax benefit purposes--and works for expenses paid in the same year even if cart is ahead of horse--BUT I do not know precisely what DC rules permit. You need to check DC specific tax rules........
