August 24, 2022
Seven Distribution Tips to Help Prepare For A Smooth Ride
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.
By clicking on any third-party hyperlink, you will leave the Alaska 529 site. Alaska 529 has not been involved in the preparation of the content from third-party providers and does not explicitly or implicitly endorse or approve such content. In addition, the plan does not alter or change such content as it is provided. The source of all content is clearly and prominently identified.
If you are not an Alaska resident, you should compare this Plan with any 529 plan offered by your home state or your beneficiary’s home state and consider, before investing, any state tax or other state benefits, such as financial aid, scholarship funds, and protection from creditors that are only available for investments in the home state’s plan. Please read and/or download the Plan Disclosure Document, which includes investment objectives, risks, fees, charges and expenses, and other information that you should read and consider carefully before investing, or call 1-866-277-1005 to request a paper copy. T. Rowe Price Investment Services, Inc., Distributor/Underwriter.
