Can You Use a 529 Plan for Summer Camp?

A 529 plan is a tax-advantaged savings vehicle designed to encourage individuals to save for future education costs. These plans are sponsored by states or educational institutions. Funds contributed to a 529 plan grow tax-free, and withdrawals are also tax-free when used for qualified education expenses. This structure aims to make saving for educational pursuits more accessible and financially beneficial.

Defining Qualified Education Expenses for 529 Plans

The Internal Revenue Service (IRS) outlines specific categories that constitute “qualified education expenses” for 529 plans. These include tuition and fees required for enrollment or attendance at an eligible educational institution, and also books, supplies, and equipment necessary for coursework.

For students enrolled at least half-time, room and board expenses also qualify. This includes costs for both on-campus housing and off-campus rent, limited to the cost of attendance allowance determined by the educational institution. Eligible educational institutions encompass a broad range, including colleges, universities, vocational schools, and other postsecondary institutions that are eligible to participate in federal student aid programs.

Beyond higher education, 529 plans can cover up to $10,000 annually per beneficiary for tuition at elementary or secondary public, private, or religious schools. Recent changes, effective July 4, 2025, expand this to include additional K-12 expenses such as curriculum, books, tutoring, and testing fees. Furthermore, fees, books, supplies, and equipment required for registered apprenticeship programs also qualify.

Summer Camp Expenses and 529 Eligibility

Expenses for recreational summer camps, such as sports camps, art camps, or general day camps, do not qualify as eligible education expenses for 529 plans. If funds are withdrawn for these activities, the earnings portion of the withdrawal would be subject to taxes and penalties.

However, certain summer program expenses could qualify under limited circumstances. If a summer program is part of a curriculum for a degree program, offers academic credit, or is required for enrollment or attendance at an eligible educational institution, it may be a qualified expense. For instance, tuition for summer courses at a community college or a credit-bearing university summer session would qualify.

The program must be academic in nature and offered by an eligible educational institution, not merely an enriching or recreational activity. Even if a program is held on a college campus, if it does not award college credit or contribute directly to a student’s degree, it does not qualify. Families should verify the academic nature of any summer program before using 529 funds.

Navigating 529 Plan Withdrawals

Once an expense is determined to be qualified, initiating a withdrawal from a 529 plan involves submitting a request to the plan administrator. This can be done online or by submitting a withdrawal request form. Funds can be sent directly to the educational institution, to the account owner, or to the beneficiary.

Maintain meticulous records of all qualified education expenses, including receipts, invoices, and proof of enrollment. While you might not need to submit these documents with the withdrawal request, they are important for substantiating the use of funds in the event of an IRS audit. It is also advisable to ensure that withdrawals are made in the same calendar year that the qualified expenses were incurred to avoid potential tax complications.

Using 529 funds for non-qualified expenses carries tax implications. The earnings portion of such withdrawals is subject to federal income tax at the recipient’s ordinary income tax rate. A 10% federal penalty tax applies to these earnings, unless an exception, such as the beneficiary’s death or disability, applies.