Big News: You Can Now Use Your 529 Plan for Tutoring!
Thanks to recent federal updates, families can now use their 529 education savings plans to pay for K-12 academic tutoring and test prep — completely tax-free.
Plan eligibility verification is the client's responsibility — see full details below.
We are excited to share a major update that makes investing in your child's education easier and more affordable. Thanks to recent federal updates, families can now use their 529 education savings plans to pay for K-12 academic tutoring and test prep completely tax-free.
You no longer have to wait until college to put your savings to work. You can use these tax-advantaged funds right now to close learning gaps, build classroom confidence, or prepare for upcoming exams.
What Is Covered?
Under the expanded federal guidelines, you can make tax-free withdrawals from your 529 account for several key educational services.
Academic Tutoring
Targeted support in core school subjects like math, reading, science, and writing.
Test Preparation
Preparation programs and fees for college entrance exams (SAT/ACT) and Advanced Placement (AP) tests.
Educational Therapies
Specialized services and executive function coaching for students with specific learning differences.
Key Rules & Limits to Keep in Mind
Annual Caps
Families can withdraw up to $20,000 per student, per calendar year across all combined K-12 qualified expenses.
Qualified Instructors
The federal law requires that tutoring be provided by a non-family member who is a licensed teacher, a subject-matter expert, or a qualified educational facility. Our center and instructors fully meet these criteria!
Location
Tutoring must take place outside of the student's home, such as at an established learning center or through an approved instructional program. Online/virtual instruction is usually acceptable, but please confirm this is allowed with your 529 plan.
How to Use Your 529 Funds in 4 Simple Steps
From your first call to your plan provider to claiming tax-free dollars — here's exactly how it works.
Confirm With Your Plan
Contact your specific 529 plan administrator. While this is a federal law, state tax treatments can vary — double-check that your state plan has adopted the new tutoring rules, and that online/virtual instruction is allowed.
Schedule Services
Enroll your child in our tutoring or test prep programs as you normally would.
Keep Detailed Records
Pay for your sessions and keep your itemized invoices. We'll provide clear, detailed receipts documenting the qualifying services — and can provide a "529 Plan Direct Reimbursement Statement" upon request.
Submit for Reimbursement
Submit your receipts to your 529 provider to withdraw your funds tax-free, or pay yourself back directly from the account.
Plan Eligibility Verification Is the Client's Responsibility
- State Variation: 529 education savings plans are governed by individual state laws and federal regulations. While federal rules allow tax-free withdrawals for K-12 tutoring, some states have not adopted these provisions or may apply distinct state-level taxes or penalties.
- Independent Review: It is the sole responsibility of the account owner (the parent or guardian) to verify directly with their specific 529 plan administrator, financial advisor, or tax professional that our tutoring services qualify for tax-free distribution under their individual plan guidelines.
- No Financial Advice: TBU Tutors, its owners, and its instructors do not provide tax, legal, or financial advice. Any information provided by our staff, website, or marketing materials regarding 529 plans is for general educational purposes only.
- No Guarantees: We make no warranties, express or implied, regarding the ultimate tax eligibility or approval of our services by any 529 plan or tax authority.
Ready to Put Your 529 Funds to Work?
Reach out to the TBU Tutors team to confirm eligibility with your provider and get your child started.