The recent tax bill passed by Congress has significantly expanded the benefits of 529 education savings accounts. These accounts still grow tax-free and allow tax-free withdrawals for qualified education expenses, but the list of such expenses has broadened considerably.

Previously limited mainly to college costs, and up to $10,000 annually for K-12 tuition, the new law now permits 529 funds to cover a wider range of expenses — including books, online materials, testing fees (SAT/ACT), tutoring, and educational therapies for students with disabilities. The annual K-12 limit is doubled to $20,000, and the list of qualifying K-12 expenses is also expanded.

Additionally, 529 accounts can now pay for adult learners and career changers to cover some apprenticeships, professional license exams (think: bar exam, CPA, real estate), continuing education courses, and technical or workforce training programs.

A notable new provision allows unused 529 funds to be rolled over — up to $35,000 — into a Roth IRA for the beneficiary, providing more flexibility for savings not spent on education.

This marks a major shift from 529s being primarily college savings plans to versatile education savings accounts supporting lifelong learning and career development, enhancing their appeal for savers.