Recent changes to federal law expanded the list of qualified expenses for 529 plans. Federally qualified expenses now include additional expenses for elementary and secondary education (K-12 Expenses) and certain Credentialing Expenses. These additions are effective July 5, 2025.
The changes also increased the annual limit for K-12 Expenses from $10,000 to $20,000 effective January 1, 2026, and made permanent the ability to roll over assets from your 529 account to an ABLE account.
K-12 Expenses now include:
- Tuition
- Curriculum and curricular materials
- Books or other instructional materials
- Online educational materials
- Tutoring or educational classes outside your home, but only if the tutor or instructor is not related to your Beneficiary and is either a licensed teacher in any state, has taught at an Eligible Educational Institution, or is a subject-matter expert in the relevant subject
- Fees for certain nationally standardized achievement tests, advanced placement tests, or exams related to college or university admission
- Fees for dual enrollment for an institution of higher education
- Certain educational therapies for students with disabilities
All these expenses must be in connection with enrollment or attendance at an elementary or a secondary public, private, or religious school.
Credentialing Expenses include:
- Tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a Beneficiary in a Credential Program, or certain other expenses incurred in connection with enrollment in or attendance at a Credential Program
- Fees for testing if required to obtain or maintain a Credential; and
- Fees for continuing education if required to maintain a Credential.
To understand what is considered a Credentialing Expense, please see definitions for Credential and Credential Program below.
Credential(s)
There are many different kinds of Credentials available in the U.S. However, for 529 Plan purposes, the list of Credentials is limited to the following:
- A Credential that is industry recognized and is:
- issued by a program that is accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies, or the American National Standards Institute;
- included in the Credentialing Opportunities On-Line (COOL) directory of credentialing programs (or successor directory) maintained by the Department of Defense or by any branch of the Armed Forces; or
- identified by the Secretary of the Treasury as being industry recognized;
- any certificate of completion for certain apprenticeship programs registered with the Secretary of Labor;
- any occupational or professional license issued or recognized by a state or the federal government, and any certification that satisfies a condition for obtaining the license; and
- any recognized postsecondary credential defined in the Workforce Innovation and Opportunity Act (known as WIOA), which defines a recognized postsecondary credential as
- a credential consisting of an industry-recognized certificate or certification;
- a certificate of completion of an apprenticeship;
- a license recognized by the state involved or federal government; or
- an associate or baccalaureate degree.
Credential Programs
The definition of a Credential Program for 529 Plan purposes has several different options. It’s a program to obtain a Credential if the program:
- is on a state list prepared under WIOA. Each state provides its own list of programs designed to comply with WIOA. For example, New York programs can be found here:
apps.labor.ny.gov/ETPL_V2/home.xhtml. - is listed in the public directory of the Web Enabled Approval Management System (WEAMS) of the Veterans Benefits Administration;
- provides training or education that prepares you to take an exam that’s required to obtain or maintain a Credential. The exam must be developed or administered by an organization widely recognized as providing reputable credentials in the occupation the exam relates to. The organization must also recognize the program as providing training or education that prepares you to take the exam; or
- is identified by the Secretary of the Treasury as being a reputable program for obtaining a Credential.
Before you take a withdrawal to pay Credentialing Expenses, it’s important to ensure you understand whether those expenses are qualified expenses for 529 purposes. Please read the Disclosure Booklet for additional detail.
Information for New York Taxpayers
The New York State Department of Taxation and Finance (DTF) has determined that K-12 tuition expenses are considered nonqualified withdrawals for New York State tax purposes. However, DTF has not yet determined whether the additional K-12 Expenses and Credentialing Expenses would be considered nonqualified withdrawals for New York State tax purposes. Learn More.
