Direct Answer
A 529 plan (qualified tuition program under IRC Section 529) is a tax-advantaged savings account for education expenses. Contributions grow tax-free; qualified withdrawals are tax-free. K-12 tuition is qualified up to $20,000/year per beneficiary (2026). SECURE 2.0 allows rolling unused balances to a Roth IRA (lifetime cap $35,000). No federal annual contribution limit applies; gift tax annual exclusion is $19,000 per donor (2026).
529 Education Savings Plan Profile: 2026 Limits and Rules
What is a 529 Plan?
A 529 plan (also called a qualified tuition program, QTP) is a tax-advantaged account established by a state or educational institution under IRC Section 529. There are two types:
- Education savings plans: Investment accounts where contributions grow tax-free and qualified withdrawals are tax-free. Most 529 plans are this type.
- Prepaid tuition plans: Allow prepurchasing credits at participating colleges at today's prices. Far less common and often restricted to in-state public schools.
The account owner (typically a parent) controls the account and names a beneficiary (the student). The owner can change the beneficiary to another qualifying family member at any time with no tax consequences. Account owners can also roll over balances between 529 plans once per 12-month period per beneficiary.
Contribution Limits and Gift Tax Rules
| Parameter | 2026 Amount |
|---|---|
| Federal annual contribution limit | None |
| Gift tax annual exclusion per donor per beneficiary | $19,000 |
| Superfunding (5-year election) per donor | $95,000 lump sum ($190,000 married) |
| K-12 tuition annual limit per beneficiary | $20,000 |
| Student loan repayment lifetime limit | $10,000 per beneficiary |
| Roth IRA rollover lifetime limit (SECURE 2.0) | $35,000 per beneficiary |
K-12 annual limit of $20,000 is effective beginning with the 2026 tax year; previously $10,000. State aggregate account balance limits typically range from $300,000 to $550,000; contributions are not limited to in-state plans. Sources: IRC Section 529; IRS Rev. Proc. 2025-19 (gift exclusion); SECURE Act; SECURE 2.0 Act of 2022.
Qualified Expenses
Qualified higher education expenses include:
- Tuition and mandatory enrollment fees
- Books, supplies, and equipment required for enrollment
- Room and board (while enrolled at least half-time, up to the school's Cost of Attendance)
- Special needs services for students with special needs
- Technology (computers, software, internet) required for enrollment
- Apprenticeship program expenses registered with the Department of Labor
- Student loan repayment (up to $10,000 lifetime per beneficiary, plus $10,000 per sibling)
K-12 tuition at public, private, or religious schools is qualified up to $20,000 per year per beneficiary (2026) per federal law. Note: Not all states conform to the K-12 provision or the student loan repayment provision; state tax deductions may be clawed back if used for these purposes in non-conforming states.
Roth IRA Rollover (SECURE 2.0)
SECURE 2.0 (effective 2024) added the ability to roll unused 529 balances to a Roth IRA for the beneficiary. Requirements:
- The 529 account must have been open for at least 15 years
- Contributions made in the prior 5 years (and their earnings) are not eligible for rollover
- The rollover counts against the annual Roth IRA contribution limit ($7,500 in 2026), so maximum rollover per year is $7,500 minus any other Roth IRA contributions made
- The beneficiary must have earned income at least equal to the rollover amount
- Lifetime rollover cap: $35,000 per beneficiary
- No income limits apply to the rollover itself
Frequently Asked Questions
- Is there a contribution limit for a 529 plan?
- There is no federal annual contribution limit for a 529 plan. Contributions are treated as gifts; the gift tax annual exclusion is $19,000 per donor per beneficiary in 2026. The 5-year superfunding election allows up to $95,000 per donor ($190,000 for married couples) treated as spread over 5 years. State aggregate balance limits typically range from $300,000 to $550,000.
- What are qualified education expenses for a 529 plan?
- Qualified higher education expenses include tuition, fees, books, supplies, room and board (at least half-time), technology, and registered apprenticeship costs. K-12 tuition at public, private, or religious schools is qualified up to $20,000/year per beneficiary (2026). Student loan repayment is qualified up to $10,000 lifetime per beneficiary. State law may not conform to all federal qualified expense categories.
- Can 529 funds be rolled over to a Roth IRA?
- Yes, under SECURE 2.0 (effective 2024), unused 529 plan funds may be rolled over to a Roth IRA for the beneficiary. The 529 must be at least 15 years old; contributions from the last 5 years are excluded; the rollover is subject to the annual Roth IRA limit ($7,500 in 2026); and the lifetime cap is $35,000 per beneficiary. Source: SECURE 2.0 Act of 2022, Section 126.