Archive · 5 Aug 2025
Trump Bill Broadens 529 Plans for Education Savings
The Trump bill changed 529 plans, which are like special savings accounts for education.
Now, you can use the money not just for college, but also for other training programs like becoming a mechanic or getting certified in food safety.
You can pay for things like classes, books, and tests.
Plus, if you have kids in grades K-12, you can now take out more money each year to pay for school expenses.
This should make it easier for people to pay for different kinds of education.
529 plans can now be used for a wider range of post-high school credentials and related expenses.
This includes programs like aviation mechanics and food safety certifications.
Expenses covered include tuition, fees, books, and exam costs.
Funds can also be used for professional licenses and certifications, such as CPA and bar exams.
The amount families can withdraw tax-free for K-12 expenses has doubled, with a higher limit starting in 2026.
- Who
- Families with 529 plans and those pursuing trade certifications or professional licenses.
- What
- Changes to 529 plans allowing them to be used for a broader range of educational expenses.
- When
- Changes enacted as part of a budget reconciliation bill in July; tax year 2026 for increased K-12 withdrawals.
- Where
- N/A
- Why
- To expand the scope of educational expenses that 529 plans can cover.
- Plan Type
- 529 Plans
- Expanded Use
- Trade certifications, professional licenses, and K-12 expenses.
- Eligible Expenses
- Tuition, fees, books, exam costs for credentialing programs.
- K-12 Withdrawal Limit (Before 2026)
- $10,000 annually
- K-12 Withdrawal Limit (Starting 2026)
- $20,000 annually
- Credentialing Programs
- Welding, aviation mechanics, CPA exam prep, bar exam review.