529 Plans Expanded

Generally expenses for computer technology are not qualified expenses for the American opportunity credit(Hope credit), lifetime learning credit or tuition and fees deduction.

However the Recovery Act has has included the cost to purchase computer technology equipment and Internet access as qualified education expense for distribution from Sec 529 plans for the tax year 2009 and 2010 if it is to be used by the student enrolled at an eligible institution.

Expanded 529 Plan Features - American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 (ARRA) added computer technology to the list of college expenses (tuition, books, etc.) that can be paid for by a 529 plan.
As a result, for 2009 and 2010, the definition of qualified higher education expenses includes expenses for computer technology and equipment or Internet access and related services to be used by the designated beneficiary of the 529 plan while enrolled at an eligible educational institution. Software designed for sports, games or hobbies does not qualify, unless it is predominantly educational in nature.