Rebecca Acorn, CPA, MST •
A 529 plan is a qualified tuition plan by IRC Section 529. 529 Plans were created to allow tax free savings for college. Distributions from the plan are not included in income if the distributions are for qualified higher education expense for the designated beneficiary. The OBBBA, expanded the categories and amounts allowed for tax-exempt distributions.
A 529 plan is a qualified tuition plan by IRC Section 529. 529 Plans were created to allow tax free savings for college. Distributions from the plan are not included in income if the distributions are for qualified higher education expense for the designated beneficiary. The OBBBA, expanded the categories and amounts allowed for tax-exempt distributions.
Under the previous law, qualified higher education expenses included
Effective July 5, 2025, the day after the signing of the OBBBA, the list of qualified higher education expenses for enrollment at an elementary or secondary school include:
Also effective for distributions taken after July, 2025, certain post-secondary credentialing expenses will be treated as qualified higher education expenses. These include:
The definition of a recognized post-secondary credential program was also added by the OBBBA.
For years starting after December 31, 2025, the $10,000 limit on qualified educational expenses related to elementary and secondary school is increased to $20,000.
Our team at Mason + Rich is here to help you navigate the changing deduction rules under the OBBBA and beyond. If you have questions about how these updates affect your business, feel free to give us a call at (603) 224-2000.
- tuition, fees, books, supplies, and equipment
- expenses incurred for special needs services for a special needs beneficiary
- expenses for the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if such equipment, software, or services are to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution
- room and board incurred by a designated beneficiary who is enrolled at least half-time at an eligible educational institution
Effective July 5, 2025, the day after the signing of the OBBBA, the list of qualified higher education expenses for enrollment at an elementary or secondary school include:
- tuition
- curriculum and curricular materials
- books or instructional materials
- online education materials
- tuition for tutoring or educational classes outside of the home, but only if the tutor is not related to the student and is licensed teacher, has taught at an eligible educational institution, or is a subject matter expert
- fees for nationally standardized achievement tests, an advanced placement examination, or any examinations related to college or university admission
- fees for dual enrollment in an institute of higher education
- educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
Also effective for distributions taken after July, 2025, certain post-secondary credentialing expenses will be treated as qualified higher education expenses. These include:
- tuition, fees, books, supplies and equipment needed for the enrollment or attendance of a designated beneficiary in a recognized postsecondary credential program or any other expense incurred in connection with such enrollment or attendance if such expense would be considered a QHEE in connection with enrollment or attendance at an eligible education institution
- fees for testing, if the testing is required to obtain or maintain a recognized postsecondary credential
- fees for continuing education if it is required to maintain a recognized postsecondary credential
The definition of a recognized post-secondary credential program was also added by the OBBBA.
For years starting after December 31, 2025, the $10,000 limit on qualified educational expenses related to elementary and secondary school is increased to $20,000.
Our team at Mason + Rich is here to help you navigate the changing deduction rules under the OBBBA and beyond. If you have questions about how these updates affect your business, feel free to give us a call at (603) 224-2000.
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