A guide to withdrawing my529 funds

Through the years, you have guided your clients in putting money into a my529 account for their beneficiaries. Now, the children are ready for college, and it is time to make a withdrawal to pay for schooling.

Withdrawals from your my529 account are tax-free as long as the money is used to pay for qualified higher education expenses. But what, exactly, is considered a qualified higher education expense?

  • tuition, mandatory fees
  • textbooks, supplies and equipment
  • computers, related equipment and internet access
  • certain room and board costs
  • K-12 tuition expenses

Withdrawing funds is easy.   

  1. Choose whether it is a partial or full-balance withdrawal.
  2. Select who will receive the funds—the account owner, the beneficiary, or the eligible educational institution directly.
  3. Determine if it is a qualified or nonqualified withdrawal.

Requesting withdrawals

Below is a list of the various methods of requesting withdrawals and where/how funds can be disbursed.

  • Submit Form 300 – by mail, fax, secure email or DocuSign.
  • Request online – can be done by Account Owner or advisor
    • Account Owner
      • Send check to yourself or beneficiary at address on record.
      • Send check to school.
      • Send ACH to account owner’s or beneficiary’s verified bank account.
    • Advisor
      • Send check to account owner or beneficiary at address on record.
      • Send check to school.
      • Schedule ACH to account owner’s verified bank account only if they have authorized them to do so within their own Account Access.

 Electronic (ACH) withdrawals

Your client can speed up the withdrawal process by setting up my529 accounts for an electronic withdrawal. It is a lot quicker than waiting for a paper check from my529.

Through Account Access at my529.org, your client can link his or her my529 account to their bank account. Your client can then grant you permission to make withdrawals from their 529 account into their linked bank account.

To link a bank account (instructions for your client)

In Account Access, look on the left side for the Manage Contributions heading, and click on Manage Linked Bank Accounts.

Click “Add a bank account link.” A window will pop up where the account owner can enter their bank information. Check the small box to initiate bank account verification. The verification process can take up to three business days to complete.

Your client then can link that bank account so you can make withdrawals from their my529 account into the bank account.

Making electronic withdrawals

When you or your client requests a withdrawal, you will see an option to select an electronic withdrawal if a savings or checking account has been linked prior to the request.

Withdrawn funds via electronic withdrawal will appear in the bank account within three to five business days, as opposed to seven to 10 business days to receive a check.

Note regarding K-12 tuition withdrawals

my529 funds can be used for kindergarten through 12th grade (K-12) tuition expenses at a public, private, or religious school. Withdrawals for K-12 tuition expenses cannot exceed a total of $10,000 per year per beneficiary from all 529 accounts (regardless of who owns the account).

my529 distributes withdrawals to pay for K-12 tuition expenses only to the account owner.