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Can I claim an education tax credit for expenses I paid using a 529 plan withdrawal?

No, you cannot double-dip. The IRS does not let you claim the American Opportunity or Lifetime Learning Credit on the same dollars of tuition you paid tax-free from a 529 plan. However, you can coordinate the two. A common strategy is to pay $4,000 of tuition out of pocket (or from taxable savings) to capture the full AOTC, then use 529 funds for the remaining tuition, room, and board. Because room and board are 529-qualified expenses but not credit-eligible expenses, steering 529 money toward them frees up tuition dollars for the credit. Keep clear records of which expenses each source paid. The IRS explains this coordination in Publication 970. Getting the sequencing right can be worth $2,500 a year in credits you'd otherwise lose.

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