What You Can Actually Pay for With 529 Plan Money

may have access to expenses are the purchases a 529 plan lets you make tax-free

A may have access to expense is something you can pay for with 529 money without owing federal income tax on the earnings. The IRS maintains a specific list. If you spend 529 money on something not on that list, you owe income tax on the earnings portion plus a 10 percent penalty — which is why knowing the rules matters before you withdraw.

The list is longer than most people think. It covers tuition and fees, room and board, books, computers, and several other categories. But it does not cover everything education-related. A test prep course, for example, is not may have access to. Neither is a laptop you buy after graduation.

The rules changed in 2024 to allow rollovers to Roth IRAs under certain conditions, which opened a new use for leftover 529 money. That option has strict requirements of its own.

Key Takeaways

• Tuition and mandatory fees at any accredited college, university, or vocational school are always may have access to, regardless of cost or location.
• Room and board counts as may have access to only if the student is enrolled at least half-time and living in college housing or off-campus housing that meets the school's definition.
• Books, supplies, and computers are may have access to only if they are required by the school, and you must be able to show that requirement if the IRS asks.
• K-12 tuition at private schools is may have access to up to $35,000 per student per year, but public school tuition is not (because it is free).
• Leftover 529 money can roll into a Roth IRA if the account has been open for at least 15 years and the rollover does not exceed annual contribution limits.

College tuition, fees, and room and board

Tuition and mandatory fees at any accredited college or university are may have access to expenses. Mandatory means fees the school requires all students to pay — not optional fees like parking or Greek life dues. This applies to four-year universities, community colleges, and vocational schools that are accredited by a recognized agency.

Room and board is may have access to if the student is enrolled at least half-time and the housing is either college-owned or off-campus housing that the school recognizes as part of its cost of attendance. The school publishes this cost of attendance figure in its financial aid materials. If you live with family or in housing the school does not recognize, room and board is not may have access to.

The school must be accredited by the U.S. Department of Education or a recognized accrediting body. If you are unsure whether a school qualifies, the Federal Student Aid website has a school search tool that shows accreditation status.

Books, supplies, computers, and equipment

Books, supplies, computers, and equipment are may have access to if the school requires them for enrollment or attendance. The key word is requires. A student who buys a laptop because it is useful is not spending may have access to money. A student whose engineering program mandates a specific laptop model is.

You need to be able to show the requirement. Keep the course syllabus, the school's equipment list, or an email from the department chair. If the IRS ever asks, you will need proof that the item was required, not optional.

This category also includes software, internet service, and lab equipment if the school requires them. It does not include general-purpose items like a desk or a printer, even if the student uses them for schoolwork.

K-12 private school tuition

Private school tuition for kindergarten through 12th grade is a may have access to expense up to $35,000 per student per year. This is a total across all 529 plans — if a student has two 529 accounts, the $35,000 limit applies to both combined.

This rule applies only to private schools. Public school tuition is not may have access to because public school is free. Some states allow charter schools to charge tuition; if yours does, that tuition is may have access to.

The $35,000 limit resets each calendar year. If you spend $20,000 in one year, you have $35,000 available again the next year.

Apprenticeship programs and student loan repayment

Tuition and fees for registered apprenticeship programs are may have access to expenses. The program must be registered with the U.S. Department of Labor or a state apprenticeship agency. This covers the training portion of programs in trades like electrical work, plumbing, and HVAC.

529 money can also pay down student loans. The lifetime limit is $35,000 per beneficiary, and no more than $35,000 can be withdrawn in a single year. This applies to federal and private loans taken out by the student, their spouse, or their siblings. Parent PLUS loans do not count.

If you use 529 money for loan repayment, that money does not count toward the annual contribution limit for the person receiving the payment.

Expenses that are not may have access to

Room and board for students living with family is not may have access to, even if the student is enrolled full-time. Transportation and commuting costs are not may have access to. Health insurance premiums are not may have access to, with one exception: if the student is on their parent's health plan and the parent pays the premium, that premium is not may have access to (because the parent is the one paying). If the student pays their own health insurance, it is still not may have access to.

Test preparation courses like SAT or ACT prep are not may have access to. Tutoring is not may have access to. Meal plans beyond the cost of room and board are not may have access to. Clothing, even if required by a dress code, is not may have access to. A laptop bought after graduation is not may have access to, even if the student used it throughout school.

Expenses for graduate school are may have access to if they meet the same rules as undergraduate expenses — tuition, fees, and required books and equipment. But a degree program itself does not change the rules.

Rollovers to Roth IRAs

Starting in 2024, unused 529 money can roll into a Roth IRA if the account meets three conditions: it has been open for at least 15 years, the beneficiary is the same person, and the rollover does not exceed the annual Roth IRA contribution limit for that year.

The 15-year clock starts when the account opens, not when money is deposited. If you opened a 529 account in 2010 and never added money, you can roll over in 2025. If you opened it in 2015, you cannot roll over until 2030.

The rollover amount counts toward the annual Roth contribution limit. If the limit is $7,000 in a given year and you roll over $5,000, you can contribute only $2,000 more to a Roth that year. The rollover itself is not taxed, but it does use up your contribution room.

Frequently Asked Questions

Can I use 529 money to pay for a laptop my child needs for high school?

Only if the high school requires that specific laptop model or type. If your child's school recommends a laptop but does not require it, the purchase is not may have access to. Check the school's course materials or ask the department chair for written confirmation of the requirement before you withdraw the money.

Does room and board count if my child lives at home while attending college?

No. Room and board is may have access to only if the student lives in college housing or off-campus housing the school recognizes as part of its cost of attendance. Living with family does not count, even if the student is enrolled full-time.

What happens if I use 529 money for something that is not may have access to?

You owe federal income tax on the earnings portion of the withdrawal, plus a 10 percent penalty on those earnings. The principal (the money you originally contributed) comes out tax-free. Only the growth is taxed and penalized. Your 529 plan provider will report the withdrawal to the IRS, and you will report it on your tax return.

Can I use 529 money to pay for my child's college textbooks if they are not required by the school?

No. Books are may have access to only if the school requires them for enrollment or attendance. If your child chooses to buy books that are recommended but not required, that spending is not may have access to. Keep documentation of the school's requirements in case you need to prove it later.

Is a meal plan beyond room and board a may have access to expense?

No. The room and board figure the school publishes already includes a standard meal plan. If your child buys additional meals or a premium meal plan beyond that standard, the extra cost is not may have access to.