Effective for distributions on/after July 5, 2025, federal law expanded tax-free 529 withdrawals for K–12 education beyond tuition to include curriculum/materials, books and instructional materials, online educational materials, qualified tutoring, standardized test and entrance exam fees, dual-enrollment fees, and certain educational therapies for students with disabilities. Beginning January 1, 2026, the total annual K–12 withdrawal limit increases from $10,000 to $20,000 per beneficiary. Note: state tax treatment may differ if your state hasn’t conformed to the federal changes.

Contributions and limits: There is no IRS annual contribution limit for 529 plans. However, contributions above $19,000 per person ($38,000 for married couples) in 2025 and 2026 generally require filing a gift tax return (Form 709)—even if no gift tax is owed due to the lifetime exemption. Many families also use the 5-year election (“superfunding”) to frontload up to $95,000 per donor ($190,000 per married couple) in a single year, which also requires Form 709 to make the election.

State rules matter for deductions and maximum balances: Most states offer state income tax deductions or credits for 529 contributions, with limits on the deductible amount ranging from $500 to unlimited per year, depending on the state (while some states offer no deduction at all). In addition, each state sets an aggregate lifetime limit per beneficiary (often tied to projected education costs), typically ranging from about $235,000 to $600,000+; once the account reaches that cap, additional contributions may be rejected until the balance falls below the limit.

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