Can I use a 529 Plan for Private School or Homeschool?

September, 26 2025 by Karen Thomas-Brandt, EA

I saw on the news the other day that parents are spending over $1,000 on back-to-school items for their kids this school year. So much money! And that doesn’t even include the cost of tuition for those students attending private school. I wondered if parents might be asking themselves, “Can I use a 529 for private school or homeschool?”

Before Legislation Passed

Before One Big Beautiful Bill (OBBB) passed, a 529 plan (or a tax-advantaged savings plan) was primarily geared toward higher education expenses. A distribution from a 529 plan could be taken tax-free if the money was used for qualified higher education expenses, such as:

Tuition
Fees
Books
Supplies
Equipment required for enrollment
Room and board (for qualifying students)
Computers
Software
Internet access
Special needs services, and
Costs for registered apprenticeship programs.

However, the key phrase above, “higher education,” refers to the years after K-12 education. For K-12 education, a 529 distribution could only be used for tuition, up to $10,000 per student annually.

What the Rule Is Now

The passage of OBBB expanded the use of 529 plans to include a wider range of K-12 expenses, including those related to homeschooling. 

In addition to K-12 tuition expenses, OBBB allows for other expenses, such as:

Curricular materials
Books
Online educational materials
Tutoring tuition
Educational therapies for students with disabilities
Fees for dual enrollment
Fees for standardized tests (e.g., AP exams, SATs)

And, starting in 2026, the limit for distributions used for K-12 expenses increased to $20,000 per student per year.

Key takeaways:

Starting in 2026, families can use 529 plans to cover up to $20,000 per student annually for eligible homeschooling expenses, including curriculum, educational materials, and tutoring, under new federal rules.
State regulations may differ; for example, California still prohibits 529 funds from being used for K-12 or homeschooling costs, regardless of federal changes. Always check your state’s guidelines to ensure compliance.
You generally won’t have to pay taxes if you use the money for approved K–12 expenses and stay within the yearly limit. But if you go over the limit or spend it on things that aren’t qualified expenses, you might have to pay taxes on the earnings and a 10% penalty—and some states could charge extra taxes too.
This expanded use of 529 plans provides valuable support to homeschooling families, making high-quality educational resources more accessible.

How do I open a 529 plan for my child?

Each state has its own plans and options, so you will want to research your state’s plans to find the best fit. Once you choose a plan, opening an account is fairly straightforward:

Gather the required information: This will be things like name, Social Security number, banking information, etc.
Complete the application: Most plans will have an online application, and some may have a mail-in option.
Make your initial contribution: This can be a one-time contribution to get things going, or you can set up regular, automatic contributions. There is no annual federal limit to 529 contributions (check your state’s rules for contribution limits); however, for gift tax purposes, you can contribute up to the annual exclusion amount ($18,000 per person for 2025) without tax implications. You will want to choose the best investment option for your goals. Consult a financial advisor or tax specialist to maximize your 529 plan benefits and ensure you follow all relevant regulations.

Finally, if you find yourself in an audit of your 529 distribution and need help, TaxAudit is here to help.