Does a 529 withdrawal have to be in the same year that the qualified education expense was paid?
I withdrew funds last August to pay for first semester college expenses for my child. Then, in late December I made another withdrawal to pay for second semester college expenses.
For the first withdrawal, the withdrawal and payment of college expenses were both in calendar year 2006. For the second withdrawal, the withdrawal was in late 2006, but the expense was paid in January 2007.
When I figure my 2006 taxes will there be a penalty on the second withdrawal because the funds were withdrawn in 2006, but expenses were paid in 2007?