What are 529 plans?
A 529 plan, also called a qualified tuition plan, is a tax-advantaged education savings account. It's managed by a state or educational institution. 529 plans offer tax benefits and other incentives to help you save for future education expenses.
529 plan earnings are tax-free. You’re not taxed on withdrawals used for qualified post-secondary education or training. You can also use these funds for K–12 expenses; up to $10,000 per student, for tax year 2025.
You can open a 529 plan for yourself or a designated beneficiary, like a child or grandchild.
Generally you get a form 1099-Q for a distribution from a 529 plan.
529 plan distributions can be coordinated with the American Opportunity and Lifetime Learning credits, and distributions from a Coverdell Education Savings Account. For more info, see IRS Publication 970.
529 plan distributions can be coordinated with the American Opportunity and Lifetime Learning credits, and distributions from a Coverdell Education Savings Account. For more info, see IRS Publication 970.
Starting in 2024, if requirements are met, you may be able to roll over a distribution from a 529 account to a Roth IRA. To learn more, see Qualified tuition program rollover to a Roth IRA.
