Expanded 529 Plan Benefits Under Recent Federal Legislation (H.R. 1)
Expanded savings options and new eligible expenses make your 529 plan more powerful than ever.

H.R. 1* was signed into law on July 4, 2025, introducing meaningful updates that impact how families can use 529 education savings plans. These changes are designed to offer greater flexibility, broader coverage of educational expenses, and more options for long-term planning.

Explore the key updates below to see how these changes could benefit your family’s education strategy.

 

Expanded K-12 Education Expenses

Effective Date: July 5, 2025

529 funds can now be used for a wider range of K–12 educational expenses beyond tuition, including:

  • Curriculum and curricular materials
  • Books or other instructional materials
  • Online educational materials
  • Qualified tutoring
  • Standardized test fees (e.g., SAT, ACT, AP)
  • Dual enrollment fees (college-level courses taken by high school students for credit)
  • Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider (occupational, behavioral, physical, and speech-language therapies)

 

Increased K–12 Annual Expense Limit

Effective Date: January 1, 2026

Beginning January 1, 2026, the annual limit on K–12 expenses covered by 529 plans will double—from $10,000 to $20,000 per student.

 

Postsecondary Career Credentials

Effective Date: July 5, 2025

Another major update permits students and adults who do not select the traditional college path to be able to use funds from a 529 account to pay for job training programs by organizations outside of mainstream colleges and universities. Funds may now be used for approved nondegree training programs (i.e., recognized postsecondary credential programs) and obtaining recognized postsecondary credentials. Eligible expenses include tuition, fees, books, supplies, and equipment, as well as fees for testing or continuing education.

A “recognized postsecondary credential program” is any training or education program that leads to a recognized credential and is generally found on an approved list or directory, including:

  • Workforce Innovation and Opportunity Act (WIOA)
  • Web enabled approval management system of the Veterans Benefits Administration (WEAMS)
  • Programs that provide training or education which prepares individuals to take an examination by a widely recognized organization providing reputable credentials
  • Programs recognized by the Secretary of the Treasury, in consultation with the Secretary of Labor

 

A “recognized postsecondary credential” refers to the certification, license, or other professional qualification earned after completing an approved program. These credentials may include:

  • Any postsecondary employment credential that is industry recognized, such as those issued or accredited by:

    • Institute for Credentialing Excellence
    • National Commission on Certifying Agencies
    • American National Standards Institute
    • COOL directory (Credentialing Opportunities On-Line) maintained by the Department of Defense or any branch of the Armed Forces
    • Credentials identified by the Secretary of the Treasury, in consultation with the Secretary of Labor
  • Any certificate of completion of an apprenticeship that is registered and certified with the Secretary of Labor under the National Apprenticeship Act
  • Any occupational or professional license issued or recognized by a state or the federal government
  • Any recognized postsecondary credential as defined by the WIOA

 

Permanent ABLE Account Rollovers

Effective Date: Taxable years beginning after December 31, 2025

Rollovers from 529 plans to ABLE accounts, which were originally set to expire at the end of 2025, are now a permanent option for individuals with disabilities. The amount that can be rolled over in any one year from a 529 plan to an ABLE account is still subject to the annual contribution limit of an ABLE account.

 

To learn more, reach out to your financial professional or tax professional.

* For the complete legislative language, please refer to the official version of the H.R. 1 congress.gov.

State tax treatment may vary from federal tax treatment when using withdrawals from a 529 account certain specified expenses, such as K-12 expenses. Consult with a qualified tax or legal professional to learn more.

All information provided is for informational and educational purposes only and is not intended to provide investment, tax, accounting, or legal advice. As with all matters of investment, tax, or legal nature, you should consult with a qualified tax or financial professional regarding your situation, as applicable. The preceding is not intended to be a recommendation or advice. Tax laws and regulations are complex and subject to change.

This material is provided for educational purposes only.

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