A 529 college savings plan has long been one of the most effective ways to save for education expenses thanks to its powerful tax advantages. These accounts allow you to contribute funds, grow them through investing, and then withdraw the money tax-free when used for qualified education expenses. Many states also offer an additional state tax deduction on contributions (subject to annual limits).

Recent tax law changes (most notably the passage of the One Big Beautiful Bill Act this year) have made 529 plans even more attractive by expanding how the funds can be used. Here are a few key updates families should know about:

• More K–12 flexibility: Families can now use up to $20,000 per year from a 529 plan for K–12 education expenses (up from $10,000).
• Expanded qualified expenses: withdrawals for K-12 expenses can now cover books, online learning tools, tutoring, and fees for standardized tests such as the SAT or ACT.
• Career and trade training: 529 funds may now be used for non-degree credential programs, technical training (such as plumbing, HVAC, or electrical work), certification or licensing fees, and continuing education programs.
• New rollover options: Unused 529 funds can be rolled into other types of accounts, including:
  • A Roth IRA in the beneficiary’s name (subject to eligibility and annual contribution limits)
  • An ABLE account (for individuals with disabilities)

These changes make 529 plans more versatile than ever, giving families and students broader opportunities to invest in education, career development, and long-term financial well-being.