Terry53029
Level 14
02-18-2020
12:32 PM
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Did the beneficiary have a scholarship, if so there is an exception to the 10% penalty
Exception #2 – The beneficiary receives a scholarship(s)
If the beneficiary receives a tax-free scholarship or grant the account owner can withdraw up to the amount of the award without paying the additional 10% penalty. What this does is changes the 529 account from a tax-free investment, to a tax-deferred investment