It is not required to open separate accounts to use for both K-12 and college purposes, but some savers may consider doing so based on their specific needs.
Withdrawals for K-12 tuition expenses are free from Federal and Virginia state taxes. Learn more about the benefit of tax-free earning. You may also consult your tax professional for more information.
As with any 529 plan withdrawal, it is the account owner's responsibility to ensure they are keeping adequate records and receipts to provide to the IRS in the event of an audit. Please review the Invest529 Withdrawal Guide for further information.
For K-12 withdrawals, Invest529 can provide the withdrawn funds directly to the K-12 institution. Payments cannot be made to a third-party tuition payment service.
Homeschools are not recognized as eligible K-12 schools under federal law. Some states may allow homeschool expenses, but Virginia does not. Check with a financial or tax professional for guidance.
Yes. Applying 529 funds directly to your student loan principal can reduce the total interest you pay over time. By lowering the balance early, interest accrues on a smaller amount, helping you save money over the life of the loan.
Qualified repayments can be made for the 529 plan beneficiary (the student) or for each of their siblings. Each individual is subject to the lifetime $10,000 limit.
Eligible loans include federal and private student loans that meet the qualifications in the Internal Revenue Code, Section 529. Non-qualified personal loans or credit card debt cannot be paid with 529 funds.
No. The lifetime limit applies across all 529 plans, so withdrawals from multiple accounts cannot be combined to exceed $10,000 per beneficiary.
A recognized postsecondary credential generally includes industry recognized certificates, approved apprenticeship completions, occupational or professional licenses issued or recognized by a state or federal agency, and credentials authorized under WIOA. Because eligibility can vary, customers should consult a tax or financial professional to confirm whether a specific credential qualifies. As the IRS releases additional guidance, we will update our materials.
No. There is no dollar limit on the amount you can use for eligible credential expenses.
Yes, if the materials or exam fees are required to obtain the recognized postsecondary credential. Optional study guides or prep courses that are not required may not qualify.
Yes. You can use your account for more than one eligible credential as long as each credential meets federal requirements for recognized postsecondary credentials.
Yes. You can use your Invest529 account for dual enrollment courses if they are offered through an eligible college and count toward a degree. Make sure the fees are billed by the school.
Yes, in most cases. Tuition, required fees, and other course related expenses may qualify if your U.S. college approves the program and the foreign school is eligible for federal student aid. Travel and sightseeing costs do not qualify.
These costs are usually not eligible. Only expenses required for enrollment or attendance, such as mandatory lab fees or course materials, can be covered.
Yes. Room and board expenses qualify if the student is enrolled at least half time. Off campus housing costs cannot exceed the school’s published cost of attendance. Keep documentation of the housing costs.
Yes, if the program is required for enrollment or part of the curriculum and billed by the school. Optional field trips or extracurricular activities that are not required for course credit are not eligible.
Withdrawals from a 529 account that are used for non-qualified education expenses are taxable as ordinary income and, unless an exception applies, are subject to a federal penalty of 10 percent. Exceptions to the non-qualified withdrawal rules include the investment earnings of a withdrawal made due to the student’s death, disability or receipt of a scholarship.
Each state’s tax rules may differ in its treatment of income from a 529 plan, so it’s important to check with your state or consult a tax advisor regarding specific tax consequences taking withdrawals.
A 529 plan is meant to cover costs required for enrollment and attendance at a school. Things like college application or testing fees, transportation/travel costs, health insurance, extracurricular activity fees, and room & board (if enrolled on a less than half-time basis) are considered non-qualified education expenses.
For K-12, home schooling expenses are not covered by 529 plans.
The Internal Revenue Code (Section 529), which governs college savings plans, outlines Qualified Higher Education Expenses. Generally, qualified higher education expenses include costs required for the enrollment or attendance at a school (tuition, fees, room and board, books, computers). If you are unsure about a particular expense, it’s best to contact a tax professional or contact your 529 plan administrator.
Here’s how you can determine whether your school or apprenticeship is covered by a 529 plan:
Higher Education: Most colleges, universities or vocational schools in the U.S. or abroad that participate in federal financial aid programs are considered eligible educational institutions. This includes schools offering undergraduate and graduate degrees, and other various certification or training. You can check the eligibility of a specific school online at Studentaid.gov/fafsa-app/FSCsearch or contact the school directly.
Apprenticeships: To be covered by a 529 plan, the trade or vocational school must have a federal school code or accept federal financial aid, while the program should be a Registered Apprenticeship Program through the Department of Labor and Industry. You should check with your program sponsor about the program eligibility.
K-12 Education: Most public, private or religious K-12 tuition expenses are covered by 529 plans. If you have questions about your school, check with your state’s Department of Education.