Can 529 Be Used for Kindergarten?

A 529 plan is a tax-advantaged savings and investment vehicle for future education expenses. States or educational institutions sponsor these plans, offering tax benefits at federal and state levels. Contributions grow tax-deferred, and withdrawals for qualified education expenses are free from federal and often state income tax.

Kindergarten Eligibility for 529 Plans

Following the Tax Cuts and Jobs Act of 2017, 529 plans can be used for elementary and secondary school tuition, including kindergarten. This federal legislation expanded the definition of qualified education expenses to encompass K-12 tuition, allowing families to cover kindergarten tuition costs.

For kindergarten tuition to qualify, the educational institution must be an “eligible educational institution.” This term, in the context of K-12, refers to any public, private, or religious school that provides elementary or secondary education as determined under state law. The expansion allows the use of 529 funds for tuition expenses at these institutions.

This provision offers flexibility for families considering private or religious kindergarten options. The ability to use 529 funds for K-12 tuition, including kindergarten, became effective in 2018, representing a change from previous rules focused on higher education.

Defining Qualified Education Expenses for K-12

While kindergarten tuition is eligible, the scope of “qualified education expenses” for K-12 education under a 529 plan is more narrowly defined compared to higher education. Initially, for K-12, qualified expenses were limited to tuition. There is an annual limit of $10,000 per student on these tuition expenses across all 529 plans.

As of July 4, 2025, the definition of qualified K-12 expenses has expanded beyond tuition. It now includes expenses such as curricular materials, books, online educational materials, tutoring, and exam fees. This broader definition falls under the annual $10,000 limit per student, which increases to $20,000 per beneficiary starting January 1, 2026.

K-12 qualified expenses differ from those for higher education. For college, a 529 plan covers a wider range of costs, including room and board, computers, and supplies. For K-12, however, expenses like transportation or general supplies not explicitly listed as curricular materials do not qualify.

Accessing Your 529 Funds

When using 529 funds for qualified kindergarten expenses, the account holder initiates a distribution request through the plan administrator. Funds can be sent directly to the educational institution or reimbursed to the account owner or beneficiary.

It is important to note that some 529 plans may have specific rules regarding direct payments for K-12 tuition. Regardless of the payment method, maintaining meticulous records is essential. Keep all receipts, invoices, and tuition statements to substantiate that withdrawals were used for qualified expenses, as these documents are crucial for tax purposes.

Withdrawals for non-qualified expenses have tax consequences. The earnings portion is subject to federal income tax at the account owner’s or beneficiary’s ordinary income tax rate, plus an additional 10% federal penalty tax. Original contributions are not taxed or penalized. Ensure withdrawals are made in the same calendar year that the qualified expenses were incurred.