529 Plans

529 Plans Aren’t Just for Kids

You don’t have to be college-age to use the money tax-free, but there are stipulations.

Question: Can I use money tax-free from a 529 college-savings plan to pay for continuing education? Or do I have to be enrolled in a college degree or certificate program? -C.B., Bethlehem, Pa.

Answer: As long as you are taking the course at an eligible institution, the cost of tuition, fees, required books and software can be withdrawn tax-free from the 529, even if you aren’t in a degree or certificate program. Eligible institutions include accredited colleges, universities, vocational schools and other postsecondary educational institutions that participate in a student aid program administered by the U.S. Department of Education (see FAFSA.gov's Federal School Code Search tool). Nearly 4,000 U.S. institutions qualify, along with some outside of the U.S., says James DiUlio, chairman of the executive board of the National College Savings Plan Network.

Continuing education needed to maintain a professional license may also be eligible, depending on the institution where you take the course.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
4 Strategies to Reduce Taxes in Retirement
retirement planning

4 Strategies to Reduce Taxes in Retirement

Don’t let the possibility of higher taxes in the future sink your retirement income plan. Consider these four ways to help manage your taxes, keeping …
May 31, 2021
13 States That Tax Social Security Benefits
social security

13 States That Tax Social Security Benefits

You may have dreamed of a tax-free retirement, but if you live in these 13 states, your Social Security benefits are subject to a state tax. That's on…
May 26, 2021

Recommended

What You Need to Know about College 529 Savings Plans
529 Plans

What You Need to Know about College 529 Savings Plans

Do you know how much you’re able to contribute or what the funds could be used to pay for? How about how contributing affects your taxes? Check out th…
April 14, 2021
How to Pay Off $130,000 in Parent PLUS Loans for Just $33,000
Paying for College

How to Pay Off $130,000 in Parent PLUS Loans for Just $33,000

Meet Nate. He took out $130,000 in Parent PLUS loans for his kids. The standard repayment plan will cost him over $170,000. But some smart strategizin…
April 12, 2021
Brandon Copeland: Should Student Athletes Be Paid to Play?
Brandon Copeland

Brandon Copeland: Should Student Athletes Be Paid to Play?

During the height of March Madness, Kiplinger.com contributing editor and NFL linebacker Brandon Copeland and Casey Schwab, founder and CEO of Altius…
March 29, 2021
When Choosing Funds for Your College 529 Plan, Don’t Make This Mistake
529 Plans

When Choosing Funds for Your College 529 Plan, Don’t Make This Mistake

Age-based funds make sense for some retirement savers, but they rarely make sense for college savers, in my opinion. Here’s why. This article is part …
March 13, 2021