How a 529 plan can benefit you

K–12 Education

• 529 funds can be used for expenses at K-12 public, private, and religious schools, including:
  • K-12 tuition
  • Curriculum and curriculum materials
  • Books or other instructional materials
  • Tuition for tutoring or educational classes outside the home
  • Fees for certain standardized tests
  • Fees for dual enrollment in an institution of higher education
  • Certain educational therapies for students with disabilities
• Withdrawal maximum is $20,000 per year, per beneficiary. 
• While qualified withdrawals from 529 plans for K–12 expenses are federally tax-free, state tax treatment will vary and could include state income taxes assessed, the recapture of previously deducted amounts from state taxes, and/or state-level penalties.

Graduate School

• All graduate and professional programs are eligible, as long as they are offered by an accredited public or private U.S. college or university. International schools that are eligible to accept U.S. federal student aid would be eligible as well.^*
• 529 assets can be used for tuition and fees; room and board; books, supplies, and equipment required for enrollment or attendance; and computer and technology needs.
• Certain expenses for special needs students are covered.
• There are no withdrawal minimums or maximums.

^*For a complete list of eligible institutions, visit studentaid.gov/fafsa-app/FSCsearch.

Apprenticeship Program

• Expenses related to apprenticeship programs, such as certificates, books, fees, equipment, and other supplies, can be paid for using assets from a 529 plan.
• Programs must be registered with the U.S. Department of Labor.
• There are no withdrawal minimums or maximums.

Vocational and Trade School

• Accredited vocational schools that qualify for federal financial aid are eligible.^*
• Assets can be used to pay for tuition and fees; room and board; books, supplies, and equipment required for enrollment or attendance; and computer and technology needs.
• Certain expenses for special needs students are covered.
• There are no withdrawal minimums or maximums.

^*For a complete list of eligible institutions, visit studentaid.gov/fafsa-app/FSCsearch.

Education Loan Repayment

• Assets in a 529 plan can be used to pay the principal or interest on a qualified education loan for the beneficiary or their sibling(s).
• There is a $10,000 lifetime maximum for each eligible individual.

Postsecondary Credentials

• 529 funds can be used for expenses associated with obtaining and maintaining a recognized postsecondary (post-high school) credential through a recognized postsecondary credential program.
• Assets can be used for tuition expenses; fees (i.e., program fees, testing fees, and continuing education fees); and books, supplies, and equipment required for the enrollment or attendance in a recognized program.
• What are recognized programs?
  • Programs authorized under the Workforce Innovation and Opportunity Act (WIOA)
  • A Web Enabled Approval Management System (WEAMS) program listed by the Veterans Benefits Administration
  • A program providing training for an examination to obtain/maintain a credential administered by a widely recognized, reputable credentialing organization
  • A program identified by the Secretary of Education as being a reputable program for obtaining a recognized postsecondary credential
• What are recognized postsecondary credentials?
  • Credentials issued by a program accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies, or the American National Standards Institute
  • Any credential included in the Credentialing Opportunities On-Line (COOL) directory of credentialing programs maintained by the Department of Defense
  • Any credential that is identified by the secretary of education as being industry recognized
  • A certificate of completion of an apprenticeship registered and certified under the National Apprenticeship Act
  • Any occupational or professional license issued or recognized by a state or by the federal government
  • A recognized credential defined under the Workforce Innovation and Opportunity Act

If you have questions about the impact of these changes on your specific situation, be sure to speak with a qualified tax professional.

Rollover to Roth IRA

You can roll over unused 529 savings to a Roth individual retirement account (IRA) maintained for the same beneficiary with the Rollover Out to Roth IRA Form. The 529 plan account must have been maintained for at least 15 years, and only contributions (and accompanying earnings) made more than five years prior can be rolled over. The amount eligible for rollover each year cannot exceed the IRA contribution limit, and there is an aggregate limit of $35,000.