August 24, 2022
You’ve diligently saved for your loved one’s future with Alaska 529. Now it’s time to use the funds to pay for the next steps in their education journey by requesting a distribution from your account. You want to be sure you’re making the right decisions so that you receive the maximum benefits and avoid any unintended penalties.
Keep these tips in mind for a smooth distribution process:
1. Gather the information you need to request a distribution. Click here for a list.
2. Check to make sure your expenses are qualified. While your Alaska 529 funds can be used to cover a wide range of education costs, not all expenses are eligible. And ask your tax advisor about the appropriate timing for requesting an Alaska 529 distribution relative to when you incur any qualified expenses.
3. Consider requesting that your Alaska 529 distributions be sent directly to the educational institution. This can help ensure the proper matching of expenses and distributions.
4. Request distributions two weeks before you need them to allow for processing and mail time before the payment deadline.
5. Hang on to receipts. While you don’t need to provide proof when requesting a distribution, it is your responsibility to keep any documentation necessary to substantiate your expenses to the IRS. Be sure to keep all records of education expenses, as well as any IRS forms, in a safe place.
6. Don’t feel rushed. There is no requirement to use your Alaska 529 funds before your beneficiary reaches any particular age. Your savings can be used at the right time in your child’s education journey, including college, graduate school, vocational training, continuing education classes and more.
7. Talk to your tax advisor to understand any tax credits, such as the American Opportunity Tax Credit, and how they may affect your 529 distributions.
By saving with Alaska 529, you’ve helped make it possible for your loved one to pursue their dreams, wherever their path takes them. If you need more information, speak with an Education Savings Specialist at 1-800-478-0003.