How to Take Distributions From Your 529 College Savings Plan

When you're ready to start paying for college, Fidelity makes it easy to send tuition and other qualified higher education payments to either your beneficiary or to their school.

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How can I pay for college using my 529 account?

The most efficient way to pay for college is to transfer money online from your 529 plan to another Fidelity account or an outside bank. Once the transfer is complete, you can pay the college using your preferred payment method. BillPay® also provides the flexibility to make single or recurring distribution payments for varying amounts, dates, and payees.

What do I need to know?

To make an online transfer from your 529 account, go to Accounts & Trade and select Transfer, then find your 529 plan and choose another Fidelity account or an outside bank.

To get started with BillPay, go to Accounts & Trade and select BillPay, and then find your 529 plan, and choose Add Payee.

If you decide not to make a transfer or use BillPay, you can:

What to expect

If you're making an online transfer from your 529 account:

  • You can enter 529 online distributions at any time. You'll need to make a trade to get your distribution. It can take up to 1-2 business days until the funds are available.
  • From your Activity & Orders tab, you can view distribution activity in Pending Transfers before the sale is completed and in History after the sale is completed.

For BillPay and forms, you'll receive an email confirmation that you've set up your instructions. If you don't use eDelivery, we'll send you a confirmation by U.S. Mail within 3–5 business days. Here's some additional things to expect:

  • If you're using BillPay, you can initiate the payment whenever you like or set up recurring payments. You can add, change, or stop payments at any time.
  • If you're using the 529 withdrawals form, the distribution will be deducted from the specific portfolio you selected, by the method you chose, and for the dollar amount you selected.
  • If you send the payments either directly to the beneficiary or an eligible institution, the tax form (Form 1099-Q) is sent to the beneficiary. If the distribution is sent to you or another payee, you'll receive the Form 1099-Q.
  • If you're requesting a full distribution, you can process this using the online transfer process. Select Withdraw Full Amount and Close Account. Keep in mind that BillPay is ineligible to process full distributions.

Frequently asked questions

  • What’s the difference between Standing Payment Instructions and the 529 Withdrawal form?

    Use the Standing Payment Instructions—529 College Savings Plan form (PDF) if you want to establish a specific set of instructions to be associated with your account. You will need to complete this form if you want your distributions to go to your beneficiary’s bank account using electronic funds transfer. Use the Withdrawals—529 College Savings Plan form (PDF) if you have more than one portfolio and want to provide direction on the specific portfolio to deduct the payment from, or if you want to take a one-time distribution (either full or partial) from a specific portfolio and prefer to make the request by mail.

  • What kind of bills can I pay using a 529 account?

    Money from a 529 account can be used, without penalty, for qualified higher education expenses, which include tuition, books, room and board, etc. Distributions for non-qualified expenses may incur federal income tax and a 10% federal penalty tax. Fidelity recommends that you retain records of payments for qualified higher education expenses in order to prepare your income tax returns. Payments made to recipients other than the account beneficiary, college, or university, or tuition payment service will be reported as such on Form 1099-Q for tax reporting purposes. Additional documentation (college invoice, statement, receipts) may be required by the IRS to verify that such payments are qualified.