529 Plans

Using a 529 Plan for High School

You’re now able to withdraw up to $10,000 tax-free from a 529 plan each year for K-12 tuition.

Question: What are the rules for withdrawing money from a 529 college-savings plan to pay for high school expenses? - E.L., Oakland, Calif.

Answer: Federal law now allows you to withdraw up to $10,000 tax-free from a 529 plan each year to pay tuition for kindergarten through 12th grade. Most states follow the federal law, but a few have different rules. California, for example, charges a 2.5% state penalty tax on earnings used for K-12 tuition. Oregon residents may have to repay any tax deduction they received for 529 plan contributions if they use the money for K-12 expenses. Check with your state and plan before making the withdrawal. See collegesavings.org for links to state plans.

Most Popular

The 15 Best Stocks for the Rest of 2022
stocks to buy

The 15 Best Stocks for the Rest of 2022

The lesson of the past two years: Be ready for anything. Our 15 best stocks to buy for the rest of 2022 reflect several possible outcomes for the seco…
June 21, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The Best Bank for You, 2022
Making Your Money Last

The Best Bank for You, 2022

Check out our list of the best candidates for your next financial institution based on interest rates, fees and other features.
June 23, 2022

Recommended

Move Over ETFs: Direct Indexing Is an Investment Strategy Worth Paying Attention to
investing

Move Over ETFs: Direct Indexing Is an Investment Strategy Worth Paying Attention to

More flexibility, more control, the potential for higher returns and tax-reducing strategies: With pros like that, could direct indexing be right for …
June 25, 2022
Smart Investing in a Bear Market
investing

Smart Investing in a Bear Market

Here's how to make the most of today’s dicey market.
June 22, 2022
Is the Stock Market Closed for Juneteenth?
Markets

Is the Stock Market Closed for Juneteenth?

In 2021, Washington passed legislation turning Juneteenth into a federal holiday. As a result, investors will have the day off Monday.
June 17, 2022
Is It Time to Move to Cash? The Father of the 4% Retirement Withdrawal Rule Did.
investing

Is It Time to Move to Cash? The Father of the 4% Retirement Withdrawal Rule Did.

With markets officially in bear territory, many retirees are anxiously wondering what they should do. The man who wrote the 4% Rule recently shifted t…
June 16, 2022