🎓 529 Plans Just Got More Powerful: K–12 Education Now Fully Covered Under the Big Beautiful Bill

The BBB expands how families can use 529 funds—and it could mean big savings for private school tuition.

For years, 529 college savings plans have been a favorite tool for families to grow education funds tax-free—as long as the money was used for qualified higher education expenses. But recent legislation, including the Big Beautiful Bill (BBB), has expanded these benefits even further.

Now, thanks to the BBB, 529 plans can be used more broadly for K–12 education expenses—giving families more flexibility and control over their children’s academic journey.

Let’s unpack what’s changed, what’s covered, and what families should consider as they revisit their 529 strategy.

📘 What Is a 529 Plan?

A 529 plan is a tax-advantaged savings account designed to encourage saving for future education expenses. Contributions grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses.

Traditionally, these plans were limited to college tuition, fees, books, and housing. But over time, federal rules have expanded what counts as “qualified”—and the BBB takes that expansion even further.

📌 What’s New Under the BBB?

Previously, 529 funds could be used for:

• College and vocational school expenses

• Apprenticeship programs

• Up to $10,000 in K–12 tuition per year (thanks to the 2017 tax law)

Now, under the Big Beautiful Bill, families can use 529 funds to pay for a much wider range of K–12 education expenses, including:

✅ Full K–12 private or religious school tuition (no $10,000 cap)✅ K–12 tutoring or educational therapy services✅ Technology, books, and curriculum for homeschool settings✅ Special education expenses

This expansion puts greater flexibility and financial power in the hands of parents—especially those with children in private schools, specialized programs, or alternative education settings.

🧮 How It Works: A Quick Example

Let’s say you have a child in private school with annual tuition of $15,000. Under previous rules, you could only withdraw $10,000 from a 529 account each year without tax consequences.

With the BBB’s expansion:

• You can now withdraw the full $15,000 (or more, if tuition rises) from your 529 plan.

• The withdrawal is completely tax-free as long as it’s used for qualifying K–12 educational expenses.

⚠️ A Few Things to Keep in Mind

While the BBB expansion is generous, there are a few caveats to be aware of:

• State rules may vary. Some states do not conform to the federal treatment of K–12 withdrawals. Check whether your state allows tax-free K–12 use of 529 funds.

• Overuse for K–12 can affect college savings. Pulling funds early could reduce what’s available for college later—make sure you’re balancing both goals.

• Annual contribution limits still apply. While there’s no federal contribution limit, most states have total account balance limits, and annual gifting rules (e.g., $18,000 per person in 2024) apply for gift tax purposes.

🧠 Final Thoughts

The Big Beautiful Bill gives families new flexibility to use 529 plans in a way that fits their educational values and goals—whether that’s private school, specialized services, or even homeschooling support. But like any tax-advantaged strategy, the key is smart planning and careful coordination.

📣 Want Help Making the Most of Your 529?

Let’s talk about:

• How to structure contributions for both K–12 and college needs

• Whether your state’s rules support the new benefits

• How to make 529s part of your overall tax strategy

📅 Schedule a strategy session today and build an education plan that’s as smart as your student.

👉 Book your call