Non-Qualified Withdrawal Penalties & Tax Consequences
Table of Contents Key Takeaways Non-qualified withdrawals from 529 plans incur a 10% penalty on the earnings portion. Both federal and state taxes apply to non-qualified withdrawals. Exceptions to penalties include disability, death, scholarships, and military service. Proper planning can help you avoid non-qualified withdrawals and their penalties. Non-qualified withdrawals can impact financial aid eligibility. … Read more