New Mexico’s 529 Education Savings Plan
Why New Mexicans Save with The Education Plan
- Tax Benefits: 100% of your contributions to The Education Plan are deductible from your New Mexico taxable income.
- Low Cost, Flexible Investment Options: A wide range of professionally managed investment options to suit every type of investor is available.
- Easy to Open, Easy to Use: You can open your account in just 15 minutes and start saving with just $1.
- Flexibility: You can use a 529 plan at any accredited institution nationwide for a wide range of qualified expenses.
What can I Use a 529 for?
A 529 can support education at many stages of life, not just college.
- Tuition, fees, books, supplies, equipment, and certain room and board at eligible colleges, universities, trade schools, and technical programs nationwide
- Up to $20,000 per student per year for qualified K-12 tuition and expenses
- Registered apprenticeships, certain postsecondary credentialing expenses, and up to $10,000 lifetime in student loan repayments per individual
Resources for New Mexicans
Frame Their First
and Last Days of School
Celebrate and share their first and last days of school with these fun photo frames. Add their photo and a few of their favorite things so you can share this milestone with friends and family — and remember it for years to come.
How It Works in Three Steps
- Open your account. Complete the application online in about 15 minutes.
- Pick an investment option. Choose an age-based option that automatically adjusts over time or a static portfolio.
- Contribute on a schedule. Start with $1 and set up recurring contributions or payroll deduction. Small, steady steps add up.
Rolling Over Funds From Another State’s Plan
If you’re new to New Mexico, you may want to consider rolling funds from another state’s 529 plan into an account with The Education Plan, so you get access to the tax incentives available for contributions. You can find out more about rolling over funds here.
Who Can Open an Account?
Parents, grandparents, family, and friends can all contribute. Contributors, not just account owners, may be eligible for the New Mexico state income tax deduction on their contributions.
Proudly New Mexican
The Education Plan is New Mexico’s official direct-sold 529 plan. From Farmington to Las Cruces, we help families turn today’s small steps into tomorrow’s big opportunities.
Frequently Asked Questions
A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.
A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include:
- Tuition and fees at accredited higher education institutions
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs
- Roth IRA rollover for the beneficiary
If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
New Mexico residents can deduct contributions to The Education Plan from their state taxable income each year. This includes contributions made to an account that you are not the account owner of.
You cannot deduct contributions from federal income taxes.
Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.
The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.
The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page.
Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education.
Qualified K-12 expenses include:
- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject.
You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:
- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address
I’m saving for my granddaughter’s
educational future. She makes me very proud!
— Elaine, New Mexico
