Facebook Pixel Using a 529 Plan for Continuing Education: What Now Qualifies After the 2025 Law Change

Using a 529 Plan for Continuing Education: Qualified Expenses and Tax Benefits

Written by Kathryn Flynn | July 31, 2025

Thinking of going back to school? Whether you’re upskilling for a new job or pursuing a long-held passion, a 529 plan might be the perfect tax-advantaged tool to make continuing education more affordable.

Not Limited to Degree and Certificate Programs

Thanks to recent legislative changes, you can now use 529 plan funds for a wider range of education and training costs. Beginning with withdrawals made after July 4, 2025, the “One Big, Beautiful Bill Act” expands qualified 529 expenses to include the following:

  • Skilled trades and vocational programs, such as CDL training, cosmetology school, HVAC certification, plumbing, welding, and electrical work
  • Professional license and certification fees, including CPA exam prep, bar exam fees, and other test costs required for licensure in law, accounting, finance, and more
  • Continuing education (CE) credits are required to maintain licensure or certification for nurses, teachers, social workers, real estate agents, and financial advisors
  • Books, supplies, and equipment are necessary for qualified licensing or credentialing programs

To qualify, programs must be listed in the Workforce Innovation and Opportunity Act (WIOA) directory or the Web Enabled Approval Management System (WEAMS) database, including many state-recognized and GI Bill-approved training providers.

Eligible expenses, and what still doesn’t qualify

Eligible expenses include tuition, required fees, books, supplies, equipment, and now, professional exams and required CE courses. However, room and board costs remain qualified only when the beneficiary is enrolled at least half-time in a degree or certificate program, and are subject to the college’s published cost of attendance.

The expansion does not cover:

  • Recreational or hobby classes
  • General career development programs without a formal credential
  • Travel and transportation expenses

Additionally, some states may not immediately align with the new federal rules. Check with your state’s plan administrator to confirm how these new uses are treated for state income tax purposes.

Other requirements for 529 qualification

For traditional college expenses, including tuition, fees, and room and board, the school must be eligible for Title IV federal student aid. This includes most accredited colleges, community colleges, and graduate programs.

You can use the Federal School Code Lookup tool to verify eligibility. Study abroad may also qualify if offered through a Title IV school. However, travel costs are not considered qualified expenses.

Starting July 4, 2025, additional programs outside of Title IV schools also qualify. These must generally be listed in the WIOA Eligible Training Provider List or the WEAMS database.

529 plans for adults

Individuals of any age can use a 529 plan. The account owner can name anyone with a Social Security or taxpayer ID number as the beneficiary, including themselves. Adults returning to school or pursuing a professional license can either change the beneficiary of an existing account or open a new 529 plan naming themselves.

Note: if the 529 is a custodial account, you cannot change the beneficiary to a parent or other adult.

No double-dipping with the Lifetime Learning Tax Credit

Adults continuing their education through the Lifetime Learning Tax Credit may qualify for a maximum $2,000 federal income tax credit.

To avoid penalties, you must subtract any expenses used to claim the Lifetime Learning Tax Credit from your total when calculating tax-free 529 plan withdrawals.

In 2024, taxpayers with a modified adjusted gross income (MAGI) of $90,000 or less ($180,000 if married and filing jointly) may claim a 20% tax credit on up to $10,000 combined tuition and mandatory fees for themselves, their spouse, and their dependent children. The tax credit is reduced for taxpayers with MAGIs between $80,000 and $90,000 ($160,000 and $180,000 for joint filers). 

Unlike the American Opportunity Tax Credit, the Lifetime Learning Tax Credit does not require the student to be enrolled in a degree program at least half-time, and there is no limit on the number of years you may claim the credit.

However, the IRS does not allow double-dipping regarding federal tax benefits. Any expenses you use to generate the Lifetime Learning Tax Credit cannot be included in qualified expenses to justify a tax-free 529 plan withdrawal. For example, students who receive the full $2,000 tax credit must subtract $10,000 from their total 529 plan qualified expenses.

Final Thoughts

This expansion marks a turning point for 529 plans, broadening their usefulness beyond traditional college and toward lifelong learning. Whether you’re a working professional, a trade student, or a parent with leftover funds, 529 plans now offer more flexibility than ever to support your education goals.

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About the author

Kathryn is a former Editor-in-Chief at Savingforcollege.com and is a subject matter expert on 529 plans. Since joining the team in 2014, she has created a variety of content to help families and financial professionals understand the best ways to save for education. She has been quoted in The Wall Street Journal, the New York Times, Fortune and other well-known media outlets. As a parent, Kathryn practices what she preaches when it comes to saving for college. She has a 529 plan for each of her three children and actively looks for ways to bring down their future college costs.

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