Non-custodial parent owning the plan

RADT 2017-03-02 03:12:53 UTC #1

Hello,
If a $17,000 tuition payment was made directly to the college, by non-custodial parent who owns the 529 account, does the IRS treat the withdrawal/payment as (un)earned income of the students and, therefore, taxes will be due by the student?

Thank you.

Brian_Boswell_SFC 2017-03-02 03:16:09 UTC #2

I just want to be clear on what you mean by this. By non-custodial, are you saying that the student cannot be claimed as a dependent by the parent? Or do you mean non-custodial as in the account is not custodial, and is a standard vs. an UGMA/UTMA 529 account?

Thank you,

Brian Boswell
VP, Research & Development

This information does not constitute tax advice and is provided for informational purposes only. Please consult your tax advisor, financial advisor, local taxing authority, and/or plan provider or sponsor for more information.