529 Qualified Expenses: What Can You Use 529 Money For?

A 529 plan is a powerful tool for saving for education that offers tax-free withdrawals on qualified expenses. You can use a 529 plan to pay for a wide range of education expenses at elementary and secondary schools (K-12) and at post-secondary schools including community colleges, four-year colleges and universities, graduate schools, and trade, technical and vocational schools.

In addition, the definition of 529 qualified expenses has been expanded to include professional training such as apprenticeships, credentialing and certification programs, and continuing education programs.

However, there are costs you may incur as part of your or your child’s education expenses that do not qualify for tax-free withdrawals. Understanding which costs qualify—and which don’t—can help you avoid taxes and penalties to maximize your savings.

What expenses can you pay for with a 529 plan?

You can use 529 funds for tuition, fees, books, supplies, room and board (for college), computers, equipment, and student loan payments at eligible educational institutions. The definition includes K-12 tuition up to $10,000 per year ($20,000 starting in 2026), unlimited college costs, trade school expenses, apprenticeship programs, and professional certification costs.

Here’s a quick list of the most common qualified expenses:

• College tuition and fees (unlimited)
• K-12 tuition ($10,000 per year, increases to $20,000 in 2026)
• Books and supplies (if required for courses)
• Room and board (college only, half-time enrollment minimum)
• Computers and internet (college only)
• Student loan payments ($10,000 lifetime limit per borrower)
• Apprenticeship programs (registered with Dept. of Labor)
• Professional certifications and licenses (as of July 4, 2025)

Here is a detailed table showing which expenses qualify for federal tax purposes. Note that your state’s definition of qualified expenses may differ.

Can I use a 529 plan to pay for college tuition?

529 funds can pay the full amount of college tuition and required fees at any eligible institution. This includes four-year colleges, community colleges, graduate schools, vocational schools, and trade schools that are eligible for Title IV federal student aid.

Online courses also qualify as long as they’re offered by an eligible institution. There is no annual limit on how much you can withdraw for college tuition and fees.

Can I use a 529 plan for K-12 tuition?

K-12 tuition expenses qualify for up to $10,000 per year per student at elementary and secondary schools, including public, private, and religious schools. The annual limit will increase to $20,000 starting in 2026.

As of July 4, 2025, the One Big Beautiful Bill Act expanded K-12 qualified expenses beyond tuition. You can now use 529 funds for curricular materials, books, online educational materials, tutoring, educational therapies for students with disabilities, dual enrollment fees, and standardized test fees including AP exams and the SAT. However, all K-12 withdrawals combined cannot exceed the $10,000 annual limit ($20,000 starting in 2026).

Can I use a 529 plan to pay for books?

Books and supplies qualify as 529 expenses if they’re required for enrollment or participation in a course. This includes textbooks, lab materials, safety equipment, and any other mandatory items for your coursework.

Optional books and supplies that aren’t required for the class do not qualify. For K-12 students, books became a qualified expense starting July 4, 2025, as part of the expanded K-12 expense rules.

Can I use a 529 plan to buy a computer?

Computers qualify as 529 expenses, but only for college and post-secondary education. You can use 529 funds to purchase a computer, peripheral equipment (like a mouse or speakers), computer software, and internet access if the beneficiary primarily uses them while enrolled at an eligible institution.

Computer software unrelated to your studies—such as games, sports software, or hobby apps—does not qualify as a 529 expense. Computers and internet access are not qualified expenses for K-12 students.

Can I use a 529 plan to pay for room and board?

Room and board expenses qualify if the student is enrolled at least half-time at a college or university. Covered expenses include on-campus housing, off-campus apartments, and meal plans.

For off-campus housing, qualified expenses are limited to the school’s official cost of attendance allowance for room and board. Room and board for study-abroad programs and summer housing for half-time students also qualify. Note that prepaid tuition plans cannot be used for room and board expenses.

Can I use a 529 plan for special needs equipment?

Special needs equipment and services are qualified 529 expenses for college students with disabilities. This includes any equipment or services necessary for the student to enroll and participate in courses at an eligible institution.

Families with special needs may also consider using a 529 ABLE account to save for education and other qualified disability expenses.

Can I use a 529 plan for apprenticeships and certifications?

529 funds can pay for registered apprenticeship programs and, as of July 4, 2025, a broader range of professional education and training. Qualified expenses include tuition, books, equipment, and testing fees for skilled trades, vocational training, professional licenses and certifications, and required continuing education.

Apprenticeship programs must be registered with the U.S. Department of Labor to qualify.

Can I use a 529 plan to pay off student loans?

529 funds can pay up to $10,000 in student loan debt per borrower over their lifetime. This limit applies separately to the beneficiary and each of their siblings, so families can potentially pay off $10,000 for multiple children using 529 funds.

If you have leftover money in your 529 after graduation, using it for student loan repayment is a tax-efficient way to reduce debt.

Can I roll over 529 funds to a Roth IRA?

As of 2024, you can transfer up to $35,000 in unused 529 funds to a beneficiary’s Roth IRA tax-free and penalty-free if you meet certain requirements. Rolling over 529 funds to a Roth IRA is now considered a qualified distribution under federal law.

However, not all states follow the federal definition of qualified expenses. Check your state’s 529 plan rules to understand potential state tax implications of a 529-to-Roth IRA rollover.

What are non-qualified 529 expenses?

Non-qualified 529 expenses include transportation costs, health insurance, college application fees, and extracurricular activities. If you withdraw 529 funds for non-qualified expenses, the earnings portion is subject to income tax and a 10% federal penalty.

Here are the most common non-qualified expenses:

• Transportation and travel costs: Gas, transit passes, airfare, vehicle rental, maintenance, or purchasing a car are not qualified expenses. The only exception is if your college explicitly includes transportation fees as part of required tuition or identifies them as mandatory for enrollment.
• Health insurance: Health insurance is not a qualified expense, even if offered by the school. The only exception is if the institution requires health insurance as part of a comprehensive tuition fee or explicitly requires it for enrollment.
• College application fees: Application fees do not qualify, though SAT and ACT fees for K-12 students do qualify as of July 4, 2025.
• Extracurricular activity fees: Sports teams, clubs, and other extracurricular activities are not qualified expenses.

How do you prove 529 plan expenses for taxes?

To avoid tax penalties, keep documentation such as tuition bills, receipts, housing contracts, and bookstore receipts for all 529 withdrawals. Your 529 withdrawals must match qualified expenses in the same tax year to remain tax-free.

You’ll receive IRS Form 1099-Q from your 529 plan showing the total distribution amount and earnings portion. This form must align with your reported education expenses. Keep records for at least three years after filing your tax return, as the IRS may request proof that your withdrawals were used for qualified expenses.

Common documents to save include:

• Tuition bills and receipts from the school
• Rental agreements or housing invoices
• Receipts for required books and supplies
• Computer purchase receipts (for college students)
• Student loan payment confirmations (for up to $10,000)
• Form 1098-T from your educational institution

Key takeaways

• 529 plans cover tuition, fees, books, room and board (college), computers (college), and equipment at K-12 schools, colleges, trade schools, and training programs.
• K-12 withdrawals are limited to $10,000 per year per student ($20,000 starting in 2026) and can include tuition, books, tutoring, and test fees as of July 4, 2025.
• College expenses have no annual limit and include tuition, fees, books, room and board (half-time enrollment), computers, internet, and special needs equipment.
• You can use 529 funds for up to $10,000 in student loan payments or roll over up to $35,000 to a beneficiary’s Roth IRA.
• Transportation, health insurance (unless explicitly required by the school), and college application fees are not qualified expenses.
• Keep receipts, bills, and Form 1099-Q to prove your withdrawals were used for qualified expenses in case of an IRS audit.

Frequently asked questions

What K-12 expenses are covered by 529 plans?

Starting July 4, 2025, you can use 529 funds for K-12 tuition, books, curricular materials, tutoring, educational therapies for students with disabilities, and standardized test fees like AP exams and the SAT. The total annual withdrawal for all K-12 expenses cannot exceed $10,000 per student ($20,000 starting in 2026).

Are laptops and tablets qualified 529 expenses?

Laptops and tablets qualify, but only for college students. You can use 529 funds to purchase computers, tablets, software, and internet access if the beneficiary primarily uses them while enrolled at an eligible post-secondary institution. Computers are not qualified expenses for K-12 students.

What happens if I withdraw 529 funds for non-qualified expenses?

The earnings portion of a non-qualified withdrawal is subject to income tax and a 10% federal penalty. The contribution portion (money you deposited) is not taxed or penalized. Some states may also recapture previously claimed tax deductions on contributions.

Does room and board qualify for off-campus housing?

Off-campus housing qualifies if the student is enrolled at least half-time. However, the qualified amount is limited to the school’s official cost of attendance allowance for room and board. Amounts exceeding this limit are considered non-qualified expenses.

Do all states follow the federal definition of qualified expenses?

No. While most states follow the federal definition, some have different rules for state tax purposes. For example, some states don’t recognize 529-to-Roth IRA rollovers as qualified and may recapture tax deductions. Check your state’s 529 plan rules before making withdrawals.

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