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Tax Guy: 4 important things to know about 529 College Savings Plan withdrawals

Tax-favored Section 529 college savings plans (sometimes called qualified tuition programs) have been around long enough that many folks are now taking withdrawals. Qualified withdrawals are always federal-income-tax-free and usually state-income-tax-free too.

However, the full story on withdrawals isn’t quite so simple. Here are the four most important things to know.

1. You have several withdrawal options

You can have the withdrawal check issued in the name of the account beneficiary (the student for whom the account was set up, which is usually your child or grandchild), or the check can be issued in the name of the college.

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