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For years, 529 plans were considered a one-trick pony—great for college savings and not much else. But with the passage of the One Big Beautiful Bill (OBBB), these plans are now far more flexible and useful than ever before.
Whether you're helping a client plan for their child's future or evaluating your own financial strategy, here’s what you need to know about the expanded capabilities of 529 accounts.
529s Aren’t Just for College Anymore
The SECURE Acts of 2019 and 2022 laid the groundwork, allowing 529 plans to cover K–12 education, student loan repayment, and even Roth IRA contributions. Now, the latest federal legislation takes it further.
Starting July 4, 2025, 529 plans can be used to pay for a wide range of professional certification and credentialing programs, including:
- CPA exam prep courses and registration
- Bar exam prep and legal licensing fees
- Certifications in skilled trades like HVAC, plumbing, CDL, welding, or cosmetology
- Aviation mechanics and other vocational training programs
- Exam fees and continuing education to maintain licensing or credentials
To qualify, the program typically needs to appear on your state’s WIOA list or the federal WEAMS database maintained by the VA. These lists include training programs approved for workforce development funding—and now, potentially eligible for 529 spending.
This update provides a significant boost to families and individuals pursuing high-demand technical careers or nontraditional education pathways.
Expanded K–12 Benefits
Parents who homeschool, use private or religious schools, or supplement public school education will also benefit.
Also beginning July 4, 2025, families can now use 529 funds for:
- Curriculum materials (e.g., textbooks, workbooks, digital resources)
- Tutoring services (if qualified)
- Online education subscriptions
- Educational therapy services
- Standardized test fees (SAT, ACT, AP)
- Dual-enrollment college courses taken during high school
These enhancements reflect the modern educational landscape, where families often combine multiple resources to support learning.
Annual Cap Doubles for K–12 Use
Previously, 529 plans capped K–12 distributions at $10,000 per student per year. That’s now increased to $20,000 per year, starting in tax year 2026.
This higher ceiling is especially helpful for families whose educational expenses exceed basic tuition—such as those using tutoring, online learning platforms, or academic therapy.
Why It Matters for Advisors and Tax Professionals
For financial planners and tax professionals, this expansion of 529 plan uses opens the door to more nuanced and customized strategies. Advisors can now:
- Help clients rethink how they allocate education savings across multiple children or stages of education
- Incorporate trade school or credentialing programs into broader wealth-building plans
- Position 529s as part of multigenerational planning—not just for college, but for early education and career readiness
Final Thoughts
529 plans have officially evolved. They’re no longer just for college tuition—they’re now a versatile financial tool for a range of educational and career-building expenses.
Whether your client’s child is heading to a four-year university, trade school, or just starting kindergarten, these new rules provide more ways to put those savings to work—smartly and strategically.
