New Allowances Created for 529 Education Savings Plans

Expanded Qualified Expenses for K–12 and Postsecondary Education

Santa Fe, NM, Sept. 09, 2025 (GLOBE NEWSWIRE) -- Many exciting new 529 enhancements were signed into law in July, which means that 529 education savings plans, including those offered by The Education Plan®, now cover additional qualified expenses. Expanded definitions of qualified education expenses included in new federal legislation cover both K–12 education and postsecondary credentialing.

Additionally, the bill allows account assets to be rolled over into ABLE accounts, while increasing the annual withdrawal limit for K–12 expenses from $10,000 to $20,000 starting in January of 2026.

Specific updates included in the bill are listed below.

New K-12 qualified expenses include:

Curriculum and curricular materials
Books and other instructional materials
Online educational materials
Tuition for tutoring or educational classes outside of the home, including at a tutoring facility (see other criteria)¹
Fees covering certain nationally standardized achievement tests, advanced placement examinations, or admission/entrance examinations (e.g., SAT, ACT, etc.)
Dual enrollment fees in a higher education institution
Certain educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical and speech-language therapies

Postsecondary expansions

In addition to postsecondary credentialing, qualified expenses now also include:

Tuition, fees, books, supplies and equipment required for the enrollment or attendance in a recognized postsecondary credential program, or other qualifying expenses incurred in connection with enrollment in or attendance at a recognized postsecondary credential program
Fees associated with tests required for postsecondary credentials
Fees for continuing education required to maintain postsecondary credentials

To qualify, credential programs must be one of the following: Authorized by the Workforce Innovation and Opportunity Act; a military credential; approved by the federal or state government; aligned with other approved postsecondary credential organizations.

“As budgeting for education-related costs remains one of the leading concerns for many parents, having additional flexibility built into an already-flexible education savings plan can brighten the outlook for families,” said Natalie Cordova, Executive Director of the New Mexico Education Trust Board. “529 plans offer tax benefits and allow for a versatile saving option, and now with the ability to utilize these funds for additional K-12 expenses and for credentialing purposes, a 529 plan can follow and support a child from the very beginning of an educational journey through one’s career.”

For a full list of qualified expenses, as well as a variety of educational resources and to open an account, visit www.TheEducationPlan.com.

The tutor cannot be related to the student and must qualify as one of the following: A licensed teacher, a current or former teacher at an eligible educational institution, or a subject matter expert in the relevant subject.

Jamie Dickerman
The Education Plan
505-720-2195
jdickerman@sunny505.com

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