How to Use a 529 Plan to Pay for K–12 Education and Score State Tax Benefits

For years, 529 plans have been synonymous with saving for college, but recent changes have expanded what counts as a qualified expense. Families can now use 529 plans for certain K–12 education costs and still potentially benefit from state tax deductions or credits—where allowed. Here’s what you need to know.

What’s Eligible for K–12 Expenses with a 529 Plan

529 plans can now cover a wide range of K–12 education expenses, including:

• Tuition at public, private, or religious schools

• Curriculum and instructional materials, including books and online resources

• Tutoring or educational classes outside the home, provided the tutor is qualified (licensed, experienced, or a subject-matter expert)

• Standardized testing fees, such as SAT, ACT, AP exams, or other college entrance tests

• Dual enrollment fees for taking college courses while in high school

• Educational therapies for students with disabilities, including occupational, physical, speech-language, and behavioral therapies, when provided by licensed professionals

  
  

Annual Distribution Limit: Families can withdraw up to $10,000 per student per year currently, but starting in 2026, this limit will increase to $20,000 per student per year, giving families more flexibility to cover K–12 costs.

State Tax Deductions for 529 Plan Contributions

While 529 plans are federally tax-advantaged, some states allow deductions or credits for contributions. With the expanded eligibility to K–12 expenses, families in these states may also enjoy state tax benefits when using 529 funds for K–12 tuition and related costs. States vary, but some that historically offer deductions or credits include:

• Arizona, Arkansas, Connecticut, Indiana, Iowa, Kansas, Maryland, Massachusetts, Mississippi, Missouri, Montana, Oklahoma, Pennsylvania, Vermont, Virginia, Wisconsin

  
  

Tip: Check your state’s specific rules, as some may limit deductions to certain expenses or exclude private school tuition.

Why 529 Plans Matter for K–12 Education

Families often face high K–12 tuition and education costs. Now, you can leverage your 529 plan to pay for a wider range of expenses while keeping the tax advantages intact. This is especially helpful for parents who want to invest in both academic enrichment and specialized learning support for their children.

How to Use a 529 Plan Effectively

1. Confirm that your 529 plan allows K–12 distributions (most do).

2. Track your expenses carefully—only qualified costs count for tax-free withdrawals.

3. Check your state’s rules for 529 deductions or credits related to K–12 expenses.

4. Consult a tax advisor to maximize both federal and state benefits.

   
   

Bottom Line: The expansion of 529 plan eligibility to K–12 education gives families a powerful tool to manage school costs and still enjoy tax advantages. Starting in 2026, the annual limit for K–12 withdrawals doubles to $20,000 per student, making it even easier to cover tuition, materials, tutoring, testing, and therapies—all while potentially earning state tax benefits.

The information provided in this blog post is intended for general informational purposes only and should not be construed as legal or tax advice. While every effort has been made to ensure the accuracy of the information, tax laws and regulations are subject to change, and individual circumstances may vary. For personalized advice and to ensure compliance with current tax laws, it is strongly recommended that you consult with a qualified tax professional, financial advisor, or legal counsel. The author and publisher of this blog assume no responsibility for any errors or omissions, or for any actions taken based on the information contained herein.