Paul L. Caron
Dean




Tuesday, June 16, 2009

Use of 529 Plan Assets for Technology

The American Recovery and Reinvestment Act of 2009 amended § 529(e)(3)(A) to add new clause (iii):

(iii) expenses paid or incurred in 2009 or 2010 for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution.

This language is quite broad, covering the "beneficiary and the beneficiary's family."  As a result, it appears to cover not only a college student's laptop but also the family's home computer and related equipment, software, and Internet access.  The language also is broad enough to cover Apple's iPhone, Sprint's Pre, Blackberry's Storm, and other smart phones.  For further discussion, see:

https://taxprof.typepad.com/taxprof_blog/2009/06/use-of-529-plan.html

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