As one of its many provisions, the new tax law known as the “OBBBA” has established new parameters for 529 education savings plans. 529 plans can now be used to pay for additional qualified educational expenses—including trade school, workforce training programs, and other postsecondary credentialing costs. This expansion of 529 plans may benefit people pursuing educational routes outside of traditional college programs, such as those entering the skilled trades. This article provides an overview of 529 savings plans and their now-expanded uses.

What is a 529 plan?

A 529 plan is a tax-advantaged savings account that can be used to pay for qualifying educational expenses. The money in 529 accounts grows tax-deferred, and withdrawals for qualifying educational expenses are typically tax-free (depending on your state’s rules). U.S. residents of any income level are able to open a 529 account for a designated beneficiary—including a relative, friend, or the account holder themself. 529 plans were initially created as a way for people to save for college tuition. In 2018, “qualified expenses” covered under 529 plans expanded to include tuition for K-12 education as well. With the passage of the One Big Beautiful Bill (OBBBA) in July of 2025, 529 plan coverage has expanded even further to include additional educational expenses.

What do 529 plans cover now?

• 529 plans continue to cover expenses related to enrollment or attendance at an eligible postsecondary school. Qualified postsecondary expenses include:
  • Tuition and fees
  • Required books, supplies, and equipment
  • Special needs services
  • Room and board for students enrolled at least half-time
  • Computers and computer equipment, software, internet access, and related services
  • Fees, books, supplies, and equipment required for participation in an apprenticeship program registered and certified with the Secretary of Labor
  • No more than $10,000 paid as principal or interest on qualified student loans of the designated beneficiary or the beneficiary’s sibling
• Previously, 529 plan coverage for K-12 expenses was limited to tuition, with a maximum annual allowance of $10,000. 529 plans have now expanded to cover additional expenses related to enrollment or attendance at an eligible elementary or secondary public, private, or religious school. In addition, the annual limit for K-12 expenses has been increased from $10,000 to $20,000 per year. Qualified K-12 expenses now include:
  • Tuition
  • Curriculum and curricular materials
  • Books or other instructional materials
  • Online educational materials
  • Tuition for tutoring or educational classes outside of the home (i.e., at a tutoring facility)
  • Fees for a nationally standardized achievement test, advanced placement exam, or any exam related to college or university admission
  • Fees for dual enrollment in a higher education institution
  • Educational therapies for students with disabilities
  • 529 plans now also cover certain expenses related to enrollment or attendance at a recognized postsecondary credential program, including:
  • Tuition and fees
  • Books
  • Supplies
  • Equipment
  • Fees for required testing
  • Fees for continuing education

What do these changes mean for unions?

The addition of postsecondary credentialing expenses to the list of qualified expenses under 529 plans broadens the population that can benefit from these tax-advantaged accounts. The benefits of 529 plans are no longer limited to individuals pursuing conventional higher education routes; 529 funds can now be used to pay for workforce training, licensure programs, and professional development. Union members who participate in these kinds of credentialing programs may stand to benefit from this expansion. For additional guidance related to the new tax law—or for any other tax or accounting support—please don’t hesitate to reach out to RBT CPAs. Call us today and find out how we can be Remarkably Better Together.