Can I borrow from my 529 plan?[ Edited ]
Is it possible to withdraw the contributions from a 529 account without tax implications, for example only withdraw that portion that has been contributed leaving in tact all the money the acct has made over and above the contributions? my intent would be to return the withdrawal within 6 months. I guess it would be like a short term loan but I know you can't borrow against 529's. It would be less than $5,000
Unfortunately, there's no way just to "borrow" the contributions to your 529 plan without touching the earnings. Unlike a Roth IRA, where contributions are all withdrawn before you touch the earnings, 529 withdrawals are made on a pro-rata basis: each withdrawal will include both earnings and principal (contributions). If you make a withdrawal, the plan administrator will send you a 1099-Q that details how much of what you pulled out is considered earnings. Since it sounds like you have earnings in your plan any withdrawal would include a portion of those earnings and those earnings would be subject to ordinary income tax and an additional 10% penalty (since your withdrawal would not be for qualified higher education expenses).
That being said, the IRS does allow you 60 days to rollover any money that you pull out of your 529 plan into a different plan to avoid the withdrawal being treated as a distribution. So, that could be a way to use the money for a very short period of time, replace it in a new plan, and not have any tax consequences (although you would have to account for the rollover when you prepare your tax return). Remember, each beneficiary is only allowed one rollover within the previous 12 months.
Since you indicated that you'll need the money for about 6 months, the rollover approach won't work either. You may have to look to other sources to make things work. Good luck!