What’s New for 529 Plans in 2025?

529 plans have been a powerful way for families to save for education with tax-free growth and tax-free withdrawals when used for qualified expenses. But beginning in mid 2025, the rules are expanding to cover a wider range of educational costs for students enrolled in elementary or secondary school.

Here is what is changing under the new act:

More K–12 Educational Expenses Now Qualify

529 funds can be used for additional expenses in connection with enrollment or attendance at a public, private, or religious school, including:

• Curriculum and curricular materials

• Books and instructional materials

• Online educational materials

• Certain tutoring or educational classes taught outside the home by qualified instructors

• Fees for standardized testing and placement exams

• Fees for dual-enrollment in an institution for higher education

• Educational therapies for students with disabilities with a licensed or accredited practitioner

When This Starts

These expanded K–12 uses apply to distributions made after July 4, 2025.

Why This Matters

Education costs go far beyond tuition. These new rules give families more flexibility to use 529 funds for the real-life costs of learning, from curriculum and materials to testing fees and specialized support.

Each week, I share a clear, bite-sized tax insight straight from my continuing education so you can stay informed without sifting through tax changes.

Next week, we discuss another expanded option for 529 Plans.

Thanks for reading,

Brandy Sparkman, EA

I’ll keep learning so you can stay focused on what you do best.

See you next week for another Tax Minute.