Understanding the Latest Revisions to Section 529 Plans

For a basic overview of Sec. 529 plans and their tax benefits visit https://myboyum.com/individual-tax/deep-dive-on-529-plans/. This current article builds upon the concepts introduced there.

The following expenses, enacted in the 2018 tax year, are still qualifying expenses under the One Big Beautiful Bill Act:

• Higher education tuition, including room & board, textbooks, and computers/equipment
• K-12 tuition, homeschool expenses, tutoring, online education materials, dual enrollment limited to $10,000
• Educational therapy for students with disabilities

Starting in tax year 2026, the new limitation per student per year is $20,000 for K-12 expenses. Additionally, qualifying expenses have been expanded to include the following:

• Recognized postsecondary credential programs and any related books and materials, examination fees, and/or continuing education fees required to maintain said postsecondary credential.

Professionals can determine if a credential program is eligible for qualified 529 plan distributions by referencing one of the following resources: your state’s Workforce Innovation and Opportunity Act (Once available, MN can be found here) or the Web Enabled Approval Management System of the Veterans Benefits Administration.

The OBBB also allows for other professional postsecondary programs not listed in those resources, as long as the exam is “widely recognized as providing reputable credentials in the occupation” or the program is identified by the Secretary of Labor “as being a reputable program for obtaining a recognized postsecondary credential” (§ 70414). Common examples of such postsecondary programs include the CPA (Certified Public Accountant), the CNA (Certified Nurse Assistant), the CISSP (Certified Information Systems Security Professional), the SHRM-CP or SHRM-SCP (Society for Human Resource Management Certified and Senior Certified Professional), the EMT (Emergency Medical Technician), among many others.

Please contact your Boyum advisor with any questions.