What Can You Use a 529 Plan For? Complete Qualified Expenses List for 2026
529 funds cover far more than just college tuition. This complete 2026 list includes K-12 expenses, trade schools, student loan repayment, and the Roth IRA rollover.
Updated April 2026 to reflect OBBBA and SECURE 2.0 changes.
College and Postsecondary Qualified Expenses
| Expense | Qualified? | Conditions |
|---|---|---|
| Tuition and mandatory fees | Yes | Any accredited college, university, vocational school |
| Required books and supplies | Yes | Must be required by the course or program |
| Room and board | Yes | Half-time+ enrollment; capped at school's published COA allowance |
| Computer and peripheral equipment | Yes | Used primarily for education (not gaming or personal use) |
| Computer software (educational) | Yes | Educational or course-required software |
| Internet access | Yes | Must be used primarily for education during enrollment |
| Special needs services | Yes | Documented disability; must be related to enrollment |
| Graduate school tuition | Yes | Same rules as undergraduate. No time limit on 529 use. |
| Study abroad program tuition | Yes | If administered by an eligible U.S. institution |
| Transportation to campus | No | Not a qualified expense |
| Health insurance premiums | No | Not a qualified expense, even if required by school |
| Clothing | No | Not a qualified expense |
| Sports or club activity fees | No | Unless required for enrollment/attendance |
K-12 Qualified Expenses (2026 Post-OBBBA)
| K-12 Expense | Qualified? | Annual Limit | Notes |
|---|---|---|---|
| Private school tuition (religious or secular) | Yes | $20,000 | Up from $10,000 before OBBBA 2026 |
| Curriculum materials and textbooks | Yes (new 2026) | Within $20K cap | OBBBA 2026 addition |
| Online educational materials | Yes (new 2026) | Within $20K cap | Digital curricula, learning platforms |
| Tutoring services | Yes (new 2026) | Within $20K cap | OBBBA 2026 addition |
| AP, SAT, ACT exam fees | Yes (new 2026) | Within $20K cap | Standardized test fees added by OBBBA |
| Dual enrollment fees | Yes (new 2026) | Within $20K cap | College courses taken while in high school |
| Therapies for students with disabilities | Yes (new 2026) | Within $20K cap | Speech, OT, PT for documented disabilities |
| School uniforms | No | N/A | Not qualified (may qualify for Coverdell ESA) |
| Transportation to/from school | No | N/A | Not qualified |
| Extracurricular activities | No | N/A | Unless required for enrollment |
Other Qualified Uses
| Use | Qualified? | Limit | Authority |
|---|---|---|---|
| Trade school / vocational program expenses | Yes | Full eligible expenses | IRC 529 (federal school code required or OBBBA credentialing) |
| Registered apprenticeship programs | Yes | Full eligible expenses | SECURE Act 2019 |
| Postsecondary credentialing programs | Yes (new 2026) | Full eligible expenses | OBBBA 2026 |
| Student loan repayment (beneficiary) | Yes | $10,000 lifetime | SECURE Act 2019 |
| Student loan repayment (sibling) | Yes | $10,000 lifetime per sibling | SECURE Act 2019 |
| 529-to-Roth IRA rollover | Yes | $35,000 lifetime; $7,500/yr (2026) | SECURE 2.0 Act 2022 |
| ABLE account rollover | Yes (permanent from 2026) | ABLE annual contribution limit | OBBBA 2026 made permanent |
Exceptions to the 10% Penalty
The 10% penalty on earnings from non-qualified withdrawals is waived (but not income tax) in these situations:
Scholarship received
Withdraw up to the scholarship amount penalty-free. Income tax still applies on earnings portion.
U.S. military academy attendance
West Point, Naval Academy, Air Force Academy, Coast Guard, Merchant Marine academies.
Death of beneficiary
Account owner or estate can withdraw funds penalty-free.
Disability of beneficiary
Must meet IRS definition of disability.
American Opportunity Tax Credit (AOTC)
If you claim AOTC, reduce qualified 529 expenses by the AOTC amount to avoid double-dipping.
Recordkeeping: What to Save
The IRS does not require you to submit receipts when you file, but you must be able to substantiate that withdrawals matched qualified expenses if audited. Keep these records for at least 3 years after the tax year of the withdrawal:
- Tuition bills and receipts from the school
- Receipts for books, supplies, and required equipment
- Room and board statements (housing contracts, meal plan invoices)
- Computer and software purchase receipts
- 529 plan withdrawal statements showing amounts and dates
- For K-12: school invoices and proof of enrollment
Frequently Asked Questions
What happens if I use 529 funds for non-qualified expenses?
Non-qualified withdrawals trigger two costs: ordinary income tax on the earnings portion of the withdrawal, plus a 10% federal penalty on those earnings. The 10% penalty applies only to earnings, not to your contributions (since contributions were made with after-tax dollars). Example: if you withdraw $10,000 from a 529 where half is contributions and half is earnings, you owe income tax plus 10% penalty on the $5,000 earnings portion. The $5,000 contribution portion has no tax or penalty. Exceptions to the 10% penalty (but not income tax) include: scholarships received, attendance at a U.S. military academy, death or disability of the beneficiary, and taking the American Opportunity Tax Credit.
Can I use 529 funds to pay off student loans?
Yes, up to $10,000 per beneficiary lifetime under the SECURE Act (effective 2019). This provision allows you to use 529 funds to pay down existing student loan debt for the beneficiary or their siblings. The $10,000 limit is a lifetime cap per beneficiary, not per year. This means if you have a $50,000 529 balance when your child graduates with $40,000 in student loans, you can use $10,000 of the 529 tax-free to pay down the loans. The remaining $30,000 can be transferred to another beneficiary, rolled to a Roth IRA (up to $35,000 lifetime under SECURE 2.0 after 15 years), or withdrawn with income tax and 10% penalty on earnings.
Does room and board qualify as a 529 expense at any school?
Room and board qualifies as a 529 expense for students enrolled at least half-time at an eligible educational institution. The maximum qualified room and board expense is either the actual amount charged by the school (if the student lives on campus) or the school's published 'cost of attendance' allowance for room and board (if the student lives off-campus). You cannot deduct more than the school's published allowance even if your actual rent is higher. If the student is enrolled less than half-time, room and board does not qualify at all.