hardship, room & board expenses, etc

[DMcGovern]

Participant wants to take a hardship withdrawal for tuition expenses, room & board for living off-campus plus estimated utilities & meal costs. We have the invoice from the college for the tuition costs, so that's covered. Not sure about the rest. I found some information on the limitations for room & board expenses (allowance provided under Federal financial aid programs).

Anyone have details on exactly what the limitations are for room & board expenses both on- and off-campus? Are estimated amounts for utilities & meals okay?

Thanks for your input!

[masteff]

My understanding is the allowance varies by school based on local conditions. It's a very easy phone call from the participant to the financial aid office of the school to say they're taking money from a 401(k) and need something showing what allowance that school uses for off campus living expenses. It's not an unusual request to them and they generally have a form/brochure or can run a print out that gives exactly what you're looking for.

Don't forget several hundred for books and supplies. And off-campus students usually need an on-campus parking permit.

[DMcGovern]

My understanding is the allowance varies by school based on local conditions. It's a very easy phone call from the participant to the financial aid office of the school to say they're taking money from a 401(k) and need something showing what allowance that school uses for off campus living expenses. It's not an unusual request to them and they generally have a form/brochure or can run a print out that gives exactly what you're looking for.

Don't forget several hundred for books and supplies. And off-campus students usually need an on-campus parking permit.

Thank you - this was very helpful!

[GBurns]

What makes these elective "expenses" elligible as hardships?

[masteff]

If you want to be purely conservative, then strictly read the regs and disallow non-"fee" items like books.

IRS website says: "tuition and related educational fees and expenses"

If you take a more moderate approach and temper your reading of the safe harbor definition with other IRS material on the topic, then books and campus parking are ordinary and expected costs of obtaining an education. And I'd love to see proof of the having been rejected on audit (especially given I survived full IRS and DOL audits).