A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.

A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include: 

- Tuition and fees at accredited higher education institutions 
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs 
- Roth IRA rollover for the beneficiary 

If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
 

A 529 plan offers several federal tax advantages:

• Tax-deferred growth: Any investment earnings in your 529 account grow free from federal income tax while the funds remain in the account.
• Tax-free withdrawals for qualified expenses: When funds are used for qualified education expenses, withdrawals are federally tax-free.
• Rollovers to Roth IRA (beginning in 2024 under the SECURE 2.0 Act): Certain rollovers from a 529 plan to a Roth IRA for the same beneficiary may also be made without federal income tax or penalty, subject to specific conditions (e.g., account age, contribution limits, and a $35,000 lifetime cap).

Withdrawals not used for qualified expenses are considered non-qualified withdrawals and may be subject to federal income tax on earnings and an additional 10% federal penalty tax.

Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.

The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.

The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page. 

Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education. 

Qualified K-12 expenses include:

- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees

Educational therapies for students with disabilities provided by a licensed or accredited    practitioner or provider, including occupational, behavioral, physical, and speech-language therapies

*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject. 

You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:

- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address