When withdrawing money from a 529 plan, what paper work needs to be filed to confirm it was spent on educational expenses (to avoid taxes/penalties)?It probably varies between states, and if so, I am specifically looking at Wisconsin.

You keep the records with ur tax return. You do not file them, but have them ready if asked.

Keep in mind the item u generally can use is tuition & that is already reported to the IRS. You need to keep the records for the room & board--even getting copies of the financial aid numbers if u also use that to calculate the non-taxable distribution.

Also, u can not use the same tuition dollar for both an education credit as well as making the money in the 529 non-taxable. Many parents let some or all of the 529 earnings be taxable as the tax plus 10% penalty is much less than the loss in credit on their return.