A parent’s guide to using 529 savings for K–12 tuition

For more than twenty years, 529 plans have helped families prepare for education costs. They’re more than just a place to save—they come with valuable tax advantages. Your money can grow tax-deferred, and when used for qualified education expenses, withdrawals are free from federal taxes.

A 529 plan is a special savings account for education. You put in money, it grows tax-free, and you can use it for qualified school costs—from kindergarten through college—without paying federal taxes on withdrawals. These costs can include college, job training programs, or tuition at a public, private, or religious school for a child or grandchild.

Named after Section 529 of the Internal Revenue Code, these “qualified tuition programs” follow specific rules that vary by state.

While many people associate 529 plans with college, some allow you to use up to $10,000 per year for K–12 tuition. This includes public, private, or religious schools, and there are no federal taxes or penalties if the expense qualifies.

Check your state’s rules before making a withdrawal. Federal law allows K–12 use, but states may set their own guidelines. Some offer tax deductions or credits; others follow federal rules without extra perks. Knowing the details can help you avoid unexpected taxes and make the most of your plan.

How to find your state’s 529 plan? College Savings Plans Network offers a tool that lets you select a state and compare options.

Choosing whether to use your 529 funds early or save them for college is all about balancing today’s needs with tomorrow’s goals. Ask yourself:

What’s your timeline?

If college is just around the corner, leaving the funds invested longer could give them more time to grow. If it’s years away, you may have time to replenish the account after using some for K–12.

Can you keep contributing?

Families who can add money each year may be able to cover both K–12 and college costs. If contributions are limited, early use could leave less for future tuition bills.

What’s your budget outside the 529?

If you have other savings or income to cover K–12 tuition, you might prefer to save the 529 for college.

Does your state offer incentives?

Some states provide tax deductions or credits for contributions but may take them back if you withdraw for K–12 expenses.

The key is to align your 529 strategy with your family’s education goals, budget, and timeline. Whether you’re aiming to give your child a strong start in grade school, a solid college fund, or both, a thoughtful approach can help you use your savings with confidence.

Need some help figuring out the process, pros, cons, risks, and tax implications of a 529 plan? Visit our Financial Education Center or contact us.