529 Plans Just Got More Flexible: New Qualified Expenses to Know

Part of our 2025 Tax Law Changes guide — the complete breakdown of the One Big Beautiful Bill Act.

529 education savings plans have quietly become one of the most flexible tools in the planning toolbox — and recent legislation expanded them further. If you advise families, it’s worth a refresher on what 529 money can now cover.

Beyond college tuition

529 plans were built for higher education, but qualified uses have grown over the years to include K-12 tuition, apprenticeship program costs, and even a limited amount of student-loan repayment. Recent changes went further still.

What the latest expansion added

• More K-12 flexibility. The annual amount that can be used for K-12 expenses was increased, and the list of eligible K-12 costs was broadened beyond tuition (for example, certain curriculum materials, tutoring, and standardized-test fees).
• Postsecondary credentials. Qualified expenses were expanded to include costs tied to recognized postsecondary credentialing and certification programs — a meaningful win for career and trade paths.

Because the exact limits and eligible-expense lists are detailed and indexed, confirm the current rules before advising a specific withdrawal.

Planning takeaways

• Revisit families who dismissed 529s as “college only.”
• Coordinate 529 withdrawals with education credits to avoid double-dipping on the same expenses.
• Remember state rules: state tax treatment of nonqualified or newly qualified uses can differ from federal.

Keep your skills current

New rules mean new questions from clients. Stay ahead with continuing education — browse the catalog, get a year of CPE with an Unlimited Access plan, or see all plans. Need your state’s rules? Check your CPE requirements.

This article is general information for tax and accounting professionals and is not legal, tax, or accounting advice. Dollar thresholds are indexed and rules change — always confirm current figures and effective dates with the IRS, plan documents, the FASB/AICPA, or qualified counsel before acting or advising clients.