If you're a parent or grandparent, chances are you've either helped a child through school, are currently doing so, or are planning for future educational expenses—whether for children, grandchildren, or even yourself. The newly enacted “Big Beautiful Bill” (H.R. 1, signed into law on July 4, 2025) brings significant changes to how families can use 529 education savings plans, offering expanded flexibility and broader coverage for a variety of learning paths.1
What Is a 529 Plan?
A 529 plan is a tax-advantaged savings account designed to help families save for education. Contributions grow tax-free, and withdrawals are also tax-free when used for qualified education expenses.
Key Changes Under the Big Beautiful Bill
1. Expanded Use for Credentialing and Licensing
529 plans can now be used for vocational and professional training programs, including:
- CPA and bar exam prep and fees
- Commercial Driver’s License (CDL) training
- Cosmetology, HVAC, plumbing, and welding certifications
This is a major win for women considering career pivots or helping children pursue skilled trades. 1
2. Broader K–12 Coverage
Previously limited to tuition, 529 funds can now cover:
- Curriculum materials (textbooks, digital tools)
- Tutoring services
- Online education platforms
- Educational therapies for students with disabilities
- Standardized test fees (SAT, ACT, AP)
- Dual-enrollment college courses during high school
This reflects the growing diversity in educational models, especially for families exploring homeschooling or alternative learning paths. 2
3. Increased Annual Withdrawal Limit
The annual cap for K–12 expenses has doubled from $10,000 to $20,000 per child, giving families more breathing room to cover rising education costs.2
Why This Matters to You
Whether you're supporting a child’s education, planning for a second career, or helping a grandchild, these changes make 529 plans more versatile and inclusive. You can now use these funds for a wider range of educational goals—without sacrificing the tax benefits.
Things to Keep in Mind
- These changes apply to distributions made after July 4, 2025.
- Not all programs qualify—check your state’s Workforce Innovation and Opportunity Act (WIOA) list or the WEAMS database to confirm eligibility.
- The IRS and Treasury may issue further guidance, so stay informed through your financial advisor or plan administrator.
Sources:
1. https://www.savingforcollege.com/article/big-beautiful-bill-education-savings-529-plans
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.