Section 529 Plans After OBBBA

Expanded education, credentialing, and K-12 uses for 529 funds.

Section 529 plan accounts—also called “qualified tuition plans” (QTPs)—have long provided a powerful tax-advantaged way to save for education expenses for children, grandchildren, and even yourself.

While contributions to these accounts are not federally tax-deductible, the money in them grows tax-free, and withdrawals remain tax-free when used for qualifying education expenses.

The recently enacted One Big Beautiful Bill Act (OBBBA) makes Section 529 plans more valuable than ever by expanding the types of expenses you can pay with these funds.

Expanded Education Uses

Historically, families used Section 529 funds primarily for college costs, with up to $10,000 per year available for K-2 tuition.

Beginning July 5, 2025, you may also use Section 529 funds to cover a wide range of qualified post-secondary credentialing expenses. These include costs for professional and occupational licenses, certificates, and credentials offered by four-year universities, community colleges, trade schools, technical schools, and other recognized providers.

You may also use Section 529 funds for continuing education courses if you already hold a degree or credential.

Examples include:

• Fees for a state license for barbers or hairstylists

• Continuing education courses for medical doctors

• The cost of the tools required for a welding certificate

Section 529 plans have evolved from college savings tools into accounts for career and lifelong learning.

Who Can Benefit

Although many families open Section 529 accounts for children and grandchildren, adults may also use them. You can set up an account for yourself or your spouse to fund continuing education or professional credentialing.

Because no time limit applies, you can leave the money in the account until you need it, or transfer it to another beneficiary. In addition, you can roll over up to $35,000 of Section 529 funds into a Roth IRA.

Expanded K-12 Benefits

The OBBBA also broadens tax-free withdrawals for K-12 education. Beyond tuition, you may now use Section 529 funds for books, online materials, tutoring, standardized test fees, and therapy for students with disabilities. Starting in 2026, the annual withdrawal limit for K-12 expenses doubles to $20,000.