You can use a 529 plan for private school. Federal law lets you withdraw up to $20,000 per student each year, tax-free, to pay tuition and a range of other education expenses at private, public, or religious K-12 schools. The cap doubled from $10,000 on January 1, 2026, after the One Big Beautiful Bill Act, signed July 4, 2025, amended 26 U.S.C. ยง 529(c)(7).1Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs The federal rules are generous, but state tax treatment and withdrawal timing still decide whether your money actually stays tax-free.
What Private School Costs Qualify
Through 2025, tuition was the only K-12 expense that qualified for tax-free 529 treatment. The 2025 law kept tuition on the list and added several categories that were previously off-limits. For distributions made after July 4, 2025, qualified K-12 expenses include:
- Tuition for enrollment or attendance at a private, public, or religious school
- Curriculum and curricular materials, including textbooks, workbooks, and digital learning tools tied to coursework
- Books and instructional materials used for instruction
- Online educational materials and subscriptions
- Tutoring or educational classes outside the home
- Standardized test fees, including norm-referenced achievement tests, AP exams, and college admission tests like the SAT and ACT
- Dual enrollment fees for college courses taken during high school
- Educational therapies for students with disabilities, provided by a licensed or accredited practitioner (occupational, behavioral, physical, and speech-language)
Tutoring has a condition worth reading closely. The tutor cannot be related to the student and must meet at least one of three qualifications: hold a teaching license in any state, have previously taught at an eligible educational institution, or have subject matter expertise in the relevant field. Paying a family member to tutor your child does not qualify, whatever their credentials.1Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs
Some routine private school costs are still not qualified expenses: uniforms, transportation, and general school supplies unrelated to curriculum. The 2025 expansion was aimed at instructional content and academic services, not logistics.
The $20,000 Annual Cap Per Student
Starting January 1, 2026, families can withdraw up to $20,000 per year per student for qualified K-12 expenses. The previous $10,000 cap had been in place since the Tax Cuts and Jobs Act first opened 529 plans to elementary and secondary education in 2018.
The cap follows the student, not the account or the account owner. If a child has separate 529 accounts funded by parents, grandparents, and an aunt, the combined K-12 distributions across every account for that child cannot exceed $20,000 in a single calendar year.2IRS.gov. Guidance on Recontributions, Rollovers and Qualified Higher Education Expenses under Section 529 Notice 2018-58
Going over the limit turns the overage into a nonqualified distribution. The earnings portion of that excess gets taxed as ordinary income, and the IRS adds a 10% penalty on top. For a family withdrawing $25,000 in a year when the cap is $20,000, only the earnings within the extra $5,000 face the tax and penalty, not the full amount. When more than one relative has opened an account for the same child, coordinating before anyone submits a withdrawal request is the only reliable way to stay under the cap.
Match the Withdrawal to the Tax Year You Pay Tuition
The calendar year you take the distribution must match the calendar year you pay the expense. This trips up more families than you’d expect. If tuition is due in January 2027 and you pull 529 funds in December 2026, the IRS sees a distribution in one year and an expense in another. That mismatch turns your withdrawal into a nonqualified distribution, exposing the earnings to income tax plus the 10% penalty.
The relevant window is the calendar year, not the school year or semester. A school year that runs from September 2026 to June 2027 spans two tax years, so each withdrawal has to line up with the payment it covers. The cleanest approach is to request the distribution within a few days of paying the bill, so both events land in the same year and your records match.
State Tax Treatment Varies
Federal rules are only half the picture. Each state decides independently whether to recognize K-12 529 distributions as qualified for state income tax purposes. Most states follow the federal definition, which means K-12 withdrawals get the same state tax treatment as college withdrawals. A meaningful number of states never adopted the 2017 federal expansion, though, and still treat K-12 spending as nonqualified at the state level.
In those non-conforming states, you face two potential costs. The earnings portion of your K-12 withdrawal may be subject to state income tax. And if you previously claimed a state tax deduction or credit for your 529 contributions, the state may recapture that benefit, requiring you to pay it back. The recapture amount depends on the state’s marginal tax rate and how much you originally deducted.
The 2025 expansion of qualified expenses adds another layer. Even states that already conform to the federal K-12 tuition rule may need to pass additional legislation to recognize the broader categories like tutoring and educational therapies. Until your state updates its conformity provisions, claiming a state tax benefit for non-tuition K-12 withdrawals carries some risk. Check with your state’s 529 plan administrator or a tax professional before assuming the new federal categories apply at the state level.
How to Request the Withdrawal
Most plan administrators accept withdrawal requests through an online portal. You’ll need the beneficiary’s full legal name and Social Security number, the school’s registered name and mailing address, and the exact dollar amount. Getting the amount right matters. Pulling more than the bill creates an excess that could become a nonqualified distribution if you don’t have other qualifying expenses to absorb it.
You’ll pick between two payment methods. A direct payment sends the funds straight to the school and keeps the paper trail cleaner. A reimbursement sends the money to your personal bank account after you’ve already paid the school out of pocket. Both work, but with reimbursement you need to keep the original invoice or receipt showing you paid the bill before the distribution arrived.
Processing typically takes three to five business days, so plan around school payment deadlines. At the end of the tax year, the plan administrator issues a Form 1099-Q reporting the gross distribution, the earnings portion, and the basis. The form goes to whoever received the funds, whether that’s the account owner or the beneficiary.3Internal Revenue Service. Instructions for Form 1099-Q (Rev. April 2025)
You determine the taxability of the distribution yourself when filing your return. The 1099-Q doesn’t tell the IRS whether your withdrawal was qualified. It just reports the numbers. Keeping tuition invoices, receipts for curriculum materials, and any other documentation of qualified expenses is your responsibility and your best protection in an audit.4Internal Revenue Service. Form 1099-Q (Rev. April 2025) Payments From Qualified Education Programs (Under Sections 529 and 530)
Which Private Schools Qualify
An eligible K-12 institution is any elementary or secondary school that qualifies as such under the laws of the state where it operates. Private schools, parochial schools, and religious schools almost universally meet this standard because they provide structured academic instruction recognized by their state.5Office of the Law Revision Counsel. 26 USC 529 – Qualified Tuition Programs
If you aren’t sure, contact the school’s administrative office and ask whether it meets the state’s definition of an elementary or secondary school. Schools operating outside their state’s educational framework, such as certain unaccredited programs or informal learning cooperatives, may not qualify. The 529 plan administrator will not usually verify eligibility for you. That responsibility falls on the account owner.