All of the above are true! You can save the extra money for additional schooling, change the beneficiary of the 529 plan to another relative, or withdraw the money from the account up to the amount of the scholarship without incurring the additional penalty. The penalty is waived if the nonqualified withdrawal results from the beneficiary receiving a scholarship.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful' we recommend you consult a tax preparer' professional tax advisor' or lawyer.