A qualified, nontaxable distribution from a 529 plan includes the cost of the purchase of any computer technology, related equipment and/or related services such as Internet access. The technology, equipment or services qualify if they are used by the beneficiary of the plan during any of the years the beneficiary is enrolled at an eligible educational institution.  This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer, such as a printer. This does not include equipment of a kind used primarily for amusement or entertainment. “Computer technology” also includes computer software used for educational purposes.

Another qualified expense is books, if required for courses. 

Travel and transportation and sorority dues DO NOT qualify.

Using a 529 plan to fund a study abroad experience offers a tax-efficient way to help cover educational costs at eligible institutions, whether studying through a U.S. college or enrolling directly at a foreign university. Remember to carefully track and calculate qualified expenses, stay within the guidelines to avoid penalties, and ensure that the institution is eligible for Title IV federal student aid. There are two different ways to study abroad.

The first is through U.S. colleges and universities offering a study abroad program in which the student spends a term or two studying at a foreign university. If the U.S. college or university is eligible for Title IV federal student aid, the study abroad program will also be eligible for federal student aid, provided that the classes in the study abroad program are accepted for credit by the U.S. college or university.

The second option is for students to enroll in a foreign college or university for their entire educational program, provided the foreign college or university is eligible for Title IV federal student aid. (Foreign colleges and universities eligible for Title IV federal student aid are limited to federal student loans.) More than 400 foreign colleges and universities are eligible for Title IV federal student aid.

As with studying in the U.S., students must be enrolled at least half-time to use 529 plan funds for room and board. If the student opts to live off campus, eligible room and board can’t exceed the institution’s published cost of attendance (COA) estimate for those expenses.

Whether it’s a semester abroad sponsored by a U.S. college or a degree program at an international university, the institution must be eligible for Title IV federal student aid, which you can check by looking up the federal school code at fsapartners.ed.gov. You can also confirm eligibility directly with the school. You can search for colleges and universities eligible for Title IV federal student aid using the Federal School Code Lookup tool for Section 529 Eligible Institutions. For schools outside of the U.S., select “CN” for Canada, “MX” for Mexico, or “FC” for foreign country in the “state” field.