529s Are Now More Flexible

Column distributed by Hearst Connecticut Media Group.

Links to resources referenced:

National Association of State Treasurers: 529 Savings Plans 2024 End-of-Year Data
- https://nast.org/wp-content/uploads/cspn-529-factsheet-march2025-1.pdf
  - Related column excerpt:
    - “There is no doubt that tax-advantaged 529 plans are popular. The National Association of State Treasurers reported that there were 16.96 million 529 educational savings accounts at the end of 2024, with total assets of $525 billion.”
Congress.gov: H.R. 1 – One Big Beautiful Bill Act
- https://www.congress.gov/bill/119th-congress/house-bill/1/text
  - Related column excerpt:
    - “First, as a result of the One Big Beautiful Bill Act, which was signed into law earlier this year, 529s can now be used for more ‘credentialing’ programs that are not offered by traditional colleges or universities. These include skilled trades and vocational courses (plumbing, electrical work), professional license and certification costs (CPA testing fees, bar exam registration) and continuing education to maintain licenses or certifications (nurses, financial advisers), according to Savingforcollege.com.”
Saving for College: Trump’s Budget Bill Lets 529 Plans Cover Credentials and Continuing Education
- https://www.savingforcollege.com/article/trump-budget-bill-529-plan-credentials-continuing-education
  - Related column excerpt:
    - “First, as a result of the One Big Beautiful Bill Act, which was signed into law earlier this year, 529s can now be used for more ‘credentialing’ programs that are not offered by traditional colleges or universities. These include skilled trades and vocational courses (plumbing, electrical work), professional license and certification costs (CPA testing fees, bar exam registration) and continuing education to maintain licenses or certifications (nurses, financial advisers), according to Savingforcollege.com.”
Institute for Credentialing Excellence
- https://www.credentialingexcellence.org/Accreditation
  - Related column excerpt:
    - “Examples of credentialing programs that qualify are those accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies or the American National Standards Institute (www.ansi.org).”
Institute for Credentialing Excellence: NCAA Accreditation
- https://www.credentialingexcellence.org/Accreditation/Earn-Accreditation/NCCA
  - Related column excerpt:
    - “Examples of credentialing programs that qualify are those accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies or the American National Standards Institute (www.ansi.org).”
U.S. Bureau of Labor Statistics: Occupational Requirements Survey
- https://www.bls.gov/ors/factsheet/credentials.htm#:~:text=In%202024%2C%2040.4%20percent%20of,Additional%20resources:
- Related column excerpt:
  - “As for the potential impact, consider that the Bureau of Labor Statistics reported 40.4 percent of civilian workers in 2024 were required to have a credential, and the number of employed civilian workers in 2024 was 161 million.”
U.S. Bureau of Labor Statistics: Economic News Release
- https://www.bls.gov/news.release/empsit.a.htm
  - Related column excerpt:
    - “As for the potential impact, consider that the Bureau of Labor Statistics reported 40.4 percent of civilian workers in 2024 were required to have a credential, and the number of employed civilian workers in 2024 was 161 million.”
IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)
- https://www.irs.gov/pub/irs-pdf/p590a.pdf
  - Related column excerpt:
    - “Another major change came about as a result of another act (SECURE 2.0, which was signed into law in 2022). 529 money can be rolled into a Roth IRA without triggering an income tax on the withdrawal. You have to follow certain rules: The 529 account must have been opened for 15 years; the rollover needs to be done through a direct trustee-to-trustee transfer; the maximum lifetime amount that can be rolled over is $35,000. Read more in IRS Publication 590-A, ‘Contributions to Individual Retirement Arrangements (IRAs).’ (See the section ‘Qualified tuition program rollover to a Roth IRA.’)”
IRS.com: 529 Plans: Questions and answers
- https://www.irs.gov/newsroom/529-plans-questions-and-answers
  - Related column excerpt:
    - “529 plans are operated by state or educations institutions, according to the IRS webpage ‘529 Plans: Questions and answers.’ Their main advantage? “Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board at an eligible education institution and tuition at elementary or secondary schools.”
IRS Publication 970: Tax Benefits for Education
- https://www.irs.gov/pub/irs-pdf/p970.pdf
  - Related column excerpt:
    - “To find out more about 529s, check out IRS Publication 970, ‘Tax Benefits for Education,’ which gives a host of details about qualified tuition programs, aka 529 plans. Savingforcollege.com provides information on how to choose a 529 plan and what each state offers. Also read Capital Group’s article ‘What can a 529 be used for? More than you may think.’”
Capital Group: “What can a 529 be used for? More than you may think”
- https://www.capitalgroup.com/advisor/insights/articles/529-plan-uses.html
  - Related column excerpt:
    - “To find out more about 529s, check out IRS Publication 970, ‘Tax Benefits for Education,’ which gives a host of details about qualified tuition programs, aka 529 plans. Savingforcollege.com provides information on how to choose a 529 plan and what each state offers. Also read Capital Group’s article ‘What can a 529 be used for? More than you may think.’”