Yes, you can use a 529 plan for private K-12 education. Federal law treats withdrawals of up to $20,000 per student per year as qualified and tax-free starting January 1, 2026, and the list of eligible expenses now reaches well beyond tuition. The main caveat is state tax law: roughly a dozen states don’t follow the federal treatment and may tax the withdrawal or claw back deductions you took when you contributed.
What Counts as a Qualified K-12 Expense
Before 2025, only tuition qualified at the K-12 level. The One Big Beautiful Bill Act, signed in 2025, broadened the list effective July 5, 2025. Under 26 USC 529(c)(7), qualified K-12 expenses now include:1Office of the Law Revision Counsel. 26 USC 529 – Qualified Tuition Programs
- Tuition at any public, private, or religious K-12 school.
- Curriculum and instructional materials, including textbooks, workbooks, and digital learning tools.
- Books and other instructional materials, covering supplemental reading and reference materials.
- Online educational materials, including subscriptions to educational platforms and digital coursework.
- Tutoring outside the home, if the tutor is unrelated to the student and is either a licensed teacher, a current or former teacher at an eligible school, or a subject matter expert.
- Nationally standardized achievement tests, Advanced Placement exams, and college admissions tests such as the SAT and ACT.
- Fees for college courses taken during high school through dual enrollment.
- Educational therapies for students with disabilities, including occupational, behavioral, physical, and speech-language therapies provided by a licensed practitioner.
Several common school costs still don’t qualify. Transportation, uniforms, extracurricular activity fees, and room and board are outside the list. Pulling 529 funds to cover any of those triggers federal income tax on the earnings portion of the withdrawal, plus a 10% additional tax on those earnings.
One housekeeping note: the IRS Q&A page on 529 plans still references the older $10,000 cap and tuition-only language as of this writing. The statute itself has been updated, and the expanded rules are what govern.
The $20,000 Annual Cap
Starting January 1, 2026, the aggregate annual K-12 withdrawal limit for a single beneficiary is $20,000.1Office of the Law Revision Counsel. 26 USC 529 – Qualified Tuition Programs That cap is per student, not per account. If a grandparent and a parent each own a 529 plan for the same child, combined K-12 withdrawals from both accounts cannot exceed $20,000 in one tax year. Owners of multiple plans for one beneficiary need to coordinate.
Anything above $20,000 pulled for K-12 expenses in a single year is a non-qualified distribution. The earnings portion of the excess is taxed as ordinary income and hit with the 10% additional tax.
The ceiling applies only to K-12. Withdrawals for college follow separate rules and are not subject to this annual cap. A family paying private high school tuition for one child and college tuition for another tracks each limit independently in the same tax year.
Religious Schools, Homeschooling, and Special Needs
Religious schools are covered. The statute references expenses connected to “an elementary or secondary public, private, or religious school,” so parochial and other faith-based schools get the same treatment as any private school.1Office of the Law Revision Counsel. 26 USC 529 – Qualified Tuition Programs
Homeschooling is less clear. The 2025 expansion added expense categories like curriculum materials, online educational materials, and tutoring that overlap heavily with homeschool costs, but the statute still ties qualified expenses to “enrollment or attendance at” a school. Whether a homeschool program counts as a school depends on how your state classifies it. Some states treat registered homeschools as a form of private schooling; others don’t. Check your state’s classification before assuming the withdrawal will be tax-free.
For students with disabilities, the new educational therapy category is a meaningful addition. Occupational, behavioral, physical, and speech-language therapies qualify when provided by a licensed or accredited practitioner.
Where Your State May Still Tax the Withdrawal
Federal tax-free status doesn’t automatically carry over to your state return. About a dozen states have not updated their tax codes to match the federal K-12 rules, and living in one creates two separate risks.
The first is recapture. Many states give a state income tax deduction or credit when you contribute to a 529 plan. If your state doesn’t recognize K-12 withdrawals as qualified, it may require you to add previously deducted contributions back into taxable income in the year of the withdrawal. The state tax break you got when you contributed is effectively erased.
The second is state tax on the earnings. In a non-conforming state, the earnings portion of a K-12 withdrawal is treated as a non-qualified distribution for state purposes even though it is tax-free federally. Some states pile on their own penalties. California adds a 2.5% state penalty tax on non-qualified distributions.
States that do not conform to the federal K-12 treatment include California, Colorado, Connecticut, Hawaii, Illinois, Michigan, Minnesota, Montana, Nebraska, New Mexico, New York, Oregon, and Vermont. Partial conformity exists in a few others. Iowa, for example, only treats K-12 distributions as qualified if the school is an Iowa school or accredited under Iowa law. This picture shifts as state legislatures act, so check your state Department of Revenue’s current guidance before making a withdrawal.
Your residence state, not the state sponsoring the 529 plan, drives the state tax result. A California resident using a Nevada-sponsored plan still faces California’s rules. Rely on your state’s official tax publication or administrative notice on Section 529 conformity rather than what a plan representative tells you by phone.
The Trade-Off Against College Savings
Using 529 money for private K-12 tuition is legal and can save federal tax, but every dollar withdrawn now is a dollar that stops compounding tax-free for college. Tax-free growth is the main advantage of the account, and K-12 withdrawals cut that growth period short.
A family that pulls $15,000 a year for four years of high school removes $60,000 from the account. Left invested, that balance could have grown meaningfully before college bills arrive. If the K-12 withdrawal today means taking student loans later, the interest on those loans can easily exceed the current tax savings.
One workaround: contribute funds specifically earmarked for K-12 use and withdraw them relatively quickly, instead of draining a long-term college balance. In states that offer a contribution deduction, you can contribute, claim the deduction, and withdraw for K-12 tuition in the same tax year. Confirm your state has no minimum holding period that would trigger recapture.
How to Make the Withdrawal
You have two options: pay the school directly from the 529 account, or pay the school yourself and reimburse from the 529 afterward. Direct payment produces a cleaner paper trail, and most plan administrators support it.
If you reimburse yourself, do it in the same tax year the expense was paid. There is no explicit IRS rule stating this, but published guidance strongly implies it, and tax professionals consistently recommend matching the distribution year to the expense year. A January 2027 withdrawal to cover December 2026 tuition risks non-qualified treatment.
To request the distribution, log into your plan’s portal or submit a withdrawal form. You’ll identify the amount, the beneficiary, and that the funds are for qualified K-12 expenses. The administrator uses that information to code the distribution on Form 1099-QA for tax reporting.
Keep every receipt. You are responsible for proving to the IRS that withdrawals went to qualified expenses within the $20,000 limit. Hold onto tuition invoices, payment confirmations, receipts for books and materials, and tutoring agreements. Retain them for at least three years after the tax year of the distribution, which lines up with the standard IRS audit window.2Internal Revenue Service. How Long Should I Keep Records
If the withdrawal exceeds the qualified expenses you actually paid, the excess is a non-qualified distribution. The earnings portion is taxed as ordinary income and subject to the 10% additional tax. Match the withdrawal to the expense, dollar for dollar.