Scholarship Reimbursement

[PreganOmaha]

If a child receives a scholarship how long can you wait to reimburse that scholarship amount?
This question was asked in 2011 - has their been any change to this question?

[dcandmc]

Please clarify what you mean by "reimburse."

Are you asking about avoiding the 10% penalty on a non-qualified 529 distribution because of a scholarship that the beneficiary previously received?

Are you asking about a recontribution to a 529 account for all or part of a previous distribution due to a refund received from the school because of a scholarship that the beneficiary received?

Or something else?

[PreganOmaha]

Sorry - this was referring to taking a taxable distribution that can avoid the 10% penalty because the beneficiary had scholarships in prior years.

[dcandmc]

I don't know of any specific IRS requirement as to how much time a 529 account owner has in which to take a non-qualified distribution and claim exemption from the 10% penalty based on a scholarship previously received by the account beneficiary.