529 Plans Expanded: What You Need to Know

If you've been setting money aside for your children or grandchildren's education, recent changes to 529 college savings plans may add options for how you use your contributions. Now could be a great time to take another look at their 529 plans. Changes under the One Big Beautiful Bill Act include:

A Bigger Range of Qualified Expenses

The definition of qualified expenses for K-12 education has expanded.¹ Costs like books, curriculum materials, tutoring, standardized testing fees, and even certain therapies for students with disabilities may now qualify in addition to tuition. This means your contributions could go further, covering more of what your grand/children need throughout their school years, not just tuition bills.

Higher Annual Limits Starting in 2026

Beginning January 1, 2026, the annual cap for K-12 withdrawals doubles from $10,000 to $20,000 per student. ² If you're contributing regularly or considering a larger gift, this increased limit may provide additional flexibility in how much you can direct toward a child or grandchild's education each year. However, you should make sure to double check depending on where you live, since not every state has adopted these new rules.

Expanded Use for Career and Trade Training

If a grand/child prefers a hands-on career over a traditional four-year degree, 529 funds can now be used to help them. Vocational certifications, such as welding or aviation mechanics, along with related books, equipment, and exam fees are now eligible. ³ This change reflects the many educational and career paths young people take today and gives you more options for supporting whichever one your grand/child chooses.

These updates could provide you with additional ways to support a grand/child's educational journey, whether that's K-12 education, college, or a trade program. As always, the details of your specific 529 plan and your state's rules matter, so it helps to review your approach with a professional who knows your full financial picture.

To learn more about updates to 529 plans, contact the office to schedule a time to talk.

^{¹ "How the Big Beautiful Bill Impacts Education Savings: 529 Plans, ABLE Accounts, and Trump Accounts." 18 JUL 2025, Saving for College.com, https://www.savingforcollege.com/article/big-beautiful-bill-education-savings-529-plans.
² Ibid.
³ Ibid.}