While K-12 private schools are eligible for payment using a 529 plan, religious schools are not eligible if the funds are being used for religious purposes. These schools may not meet the criteria set by the IRS for eligible educational institutions, such as accreditation standards. International schools, whether they are located outside the United States or within the country, are not eligible for payment using a 529 plan. It is crucial to understand which schools are not eligible to avoid any potential issues with the IRS. While there are several types of eligible schools for 529 plans, some institutions are not eligible for payment using the plan. However, there is a limit of $10,000 per year for K-12 expenses, and not all states have adopted this provision (as you can see below). This means that parents and guardians can use a 529 plan to pay for tuition expenses at private elementary, middle, or high schools. In 2017, the Tax Cuts and Jobs Act expanded the use of 529 plans to include K-12 private schools. Examples of vocational schools include the Culinary Institute of America, the International Yacht Restoration School, and the New England Institute of Technology. These institutions offer specialized training and education in fields such as nursing, healthcare, technology, and construction. Vocational schools and trade schools are another type of eligible school that can be paid for using a 529 plan. Examples of accrediting agencies include the Middle States Association of Colleges and Schools, the Higher Learning Commission, and the New England Association of Schools and Colleges. The definition of an accredited institution is one that has met specific educational standards set by accrediting agencies recognized by the Department of Education. Even student loans that have been taken out to pay for these types of schools are eligible to be paid back with 529 funds! Accredited Colleges and UniversitiesĪccredited colleges and universities are the most popular option for 529 plans. ![]() The Internal Revenue Service (IRS) outlines the criteria for eligible educational institutions, which include accredited colleges and universities, vocational schools and trade schools, and K-12 private schools. The first thing to understand is that not all schools are eligible for payment using a 529 plan. ![]() In this article, we will dive into the different types of schools that can be paid for with a 529 plan, what expenses are considered eligible, and the contribution limits and tax benefits of the plan. While it may seem straightforward, it is essential to know which types of schools can be paid for with a 529 plan to maximize its benefits fully. One such option is the 529 plan, a tax-advantaged savings plan designed to help families save for education expenses. As the cost of education continues to rise, parents and guardians are always on the lookout for ways to save money and secure their child’s future.
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