Common use of Qualified Education Expenses Clause in Contracts

Qualified Education Expenses. Qualified Education Expenses currently include Qualified Higher Education Expenses, which are tuition, fees, books, supplies, and equipment required for the enrollment or attendanceof a designated beneficiary at an Eligible Educational Institution. Such Qualified Higher Education Expenses also include expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B) of the Code), computer software (as defined in section 197(e)(3)(B) of the Code), or Internet access and related services, if such equipment, software, or services are to be used primarily by the designated beneficiary during any of the years the designated beneficiaryis enrolled at an Eligible Educational Institution. Expenses for computer software designed for sports, games, or hobbies do not qualify as Qualified Higher Education Expenses unless the software is predominantly educational in nature. Qualified Higher Education Expenses also include expenses for special needs services in the case ofa special needs beneficiary who incurs such expenses in connection withenrollment or attendance at an Eligible Educational Institution, as well as Apprenticeship Program Expenses. Also included as a Qualified Higher Education Expense is an amount for the room and board the designated beneficiary may incur while attending an Eligible Educational Institution at least half-time. Half-time is defined as half the full-time academic workload for the course of study being pursued as determined under the standards of the Eligible Educational Institution where the designated beneficiary is enrolled. The limit for annual room and board expenses for campus and off-campus housing is the allowance included in the “cost of attendance” at the Eligible Educational Institution, or if greater, the actual amount charged by the Eligible Educational Institution for room and board costs for the applicable period. A designated beneficiary need not be enrolled at least half-time at an Eligible Educational Institution to use a qualified withdrawal to pay for expenses relating to tuition, fees, books, supplies, equipment, and special needs services.

Qualified Education Expenses. Qualified Education Expenses currently include Qualified Higher Education Expenses, which are tuition, fees, books, supplies, and equipment required must be incurred for the enrollment or attendanceof a designated beneficiary at an Eligible Educational Institution. Such Qualified Higher Education Expenses also include expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B) benefit of the Code), computer software (as defined in section 197(e)(3)(B) of the Code), or Internet access and related services, if such equipment, software, or services are to be used primarily by the designated beneficiary during any of the years the designated beneficiaryis enrolled at an Eligible Educational InstitutionBeneficiary. Expenses for computer software designed for sports, games, or hobbies do not To qualify as Qualified Higher Education Expenses unless the software is predominantly educational in nature. Qualified Higher Education Expenses also include expenses for special needs services in the case ofa special needs beneficiary who incurs such expenses in connection withenrollment or attendance at an Eligible Educational Institution, as well as Apprenticeship Program Expenses. Also included as a Qualified Higher Education Expense is an amount for higher education, the cost of room and board must be incurred during an academic period during which the designated beneficiary may incur while attending an Beneficiary is enrolled or accepted for enrollment in a degree, certificate or other program that leads to a recognized educational credential awarded by a post-secondary Eligible Educational Institution while attending at least half-time. HalfRoom and board expenses that may be treated as Qualified Education Expenses generally will be limited to the room and board allowance calculated by the Eligible Educational Institution in its “cost of attendance” for purposes of determining eligibility for federal education assistance for that year. For students living in housing owned or operated by the Eligible Educational Institution, if the actual amount charged for room and board is higher than the “cost of attendance” figure, the actual amount may be treated as qualified room and board costs. A Beneficiary will be considered to be enrolled at least half-time if he or she is defined as enrolled for at least half the full-time academic workload for the course of study being pursued as determined under the standards of the Eligible Educational Institution where the designated beneficiary he or she is enrolled. The limit institution’s standard for annual room and board expenses for campus and offa full-campus housing is the allowance included in the “cost of attendance” at the Eligible Educational Institution, time workload must equal or if greater, the actual amount charged exceed a standard established by the Eligible Educational Institution for room and board costs for U.S. Department of Education under the applicable periodHigher Education Act of 1965, as in effect on August 5, 1997. A designated beneficiary need Beneficiary is not required to be enrolled at least half-time at an Eligible Educational Institution to use a qualified withdrawal Qualified Withdrawal to pay for expenses relating to tuition, fees, books, supplies, equipment, and special needs services.. Any reference to Qualified Education Expenses also includes a reference to tuition in connection with enrollment or attendance at a K-12 Institution up to the maximum amount described in the “Program Summary”. Non-Qualified Withdrawals‌ In accordance with Section 529 of the Code, the earnings portion of a Non-Qualified Withdrawal will be treated as income to the recipient and is subject to applicable federal and state and/or local income tax. In addition, to satisfy the requirements of Section 529, the earnings portion of a Non-Qualified Withdrawal may be subject to an additional 10% federal tax. Although the Program Manager will report the earnings portion of all distributions, it is the ultimate responsibility of the Account Owner to calculate and report any tax liability. Account Owner may wish to consult with a tax advisor regarding the potential tax implications of any distribution. Distributions used to qualify for an American Opportunity Tax Credit or Lifetime Learning Credit A distribution for Qualified Education Expenses that is taken into account by a Beneficiary (or a person who can claim the Beneficiary as a dependent) in qualifying for an American Opportunity Tax Credit or Lifetime Learning Credit (two federal income tax credits that are available to taxpayers with marginal adjusted gross incomes below a certain level who incur qualified tuition and related expenses) constitutes a Non- Qualified Withdrawal. Other withdrawals‌