Using Your 529 Plan for Credentials and Professional Certifications
For years, 529 education savings plans have been best known as a smart way to save for college. But education doesn’t always follow a traditional four-year path, and recent updates have made 529 plans increasingly flexible to suit a wide variety of educational options.
Thanks to a recent update to federal law, certain credentialing and professional certification expenses are now included as 529 qualified education expenses. That’s great news for savers, and it makes a 529 plan like The Education Plan® even more flexible and practical for today’s learners.
What’s New: Credentialing Is Now a Qualified Expense
As of July 2025, certain credentialing and professional certification programs are now considered qualified education expenses. This means your 529 can now help pay for career-focused programs and credentials that are officially recognized and regulated.
To qualify, the program or credential must meet federal recognition standards, such as being:
- Listed on an approved state or federal directory, including
- State workforce training lists under the Workforce Innovation and Opportunity Act (WIOA)
- The U.S. Department of Veterans Affairs’ WEAMS directory
- Designed to prepare students for a recognized certification exam, where
- The exam is required to earn or maintain the credential, and
- The credentialing organization recognizes the program as valid preparation
- Identified by the U.S. Department of the Treasury, in consultation with the U.S. Department of Labor, as a reputable credentialing program
In addition, the credential itself must be officially recognized. Eligible credentials may include:
- Industry-recognized certifications, such as those
- Issued by programs accredited by organizations like the Institute for Credentialing Excellence, the National Commission on Certifying Agencies (NCCA), or the American National Standards Institute (ANSI)
- Listed in the Department of Defense’s Credentialing Opportunities On-Line (COOL) directory
- Registered apprenticeships, certified by the U.S. Department of Labor
- Occupational or professional licenses issued or recognized by a state or the federal government
- Other recognized postsecondary credentials defined under federal workforce laws and offered through approved programs
While the details matter behind the scenes, the big takeaway is simple:
If a credential or program is officially recognized and designed to prepare someone for work in a specific field, a 529 may now help cover the cost.*
This expansion makes a 529 plan more flexible than ever. It can support not just K-12 and post-secondary degrees, but the many education and training paths people take to build meaningful careers, at any stage in one’s career.*
Why This Matters for Families and Learners
Education today looks different than it did a generation ago. Many careers rely on:
- Industry certifications
- Occupational licenses
- Short-term training programs
- Continuing education to stay current
By expanding qualified expenses, 529 plans now better reflect how people actually learn, train, and advance in their careers. Whether your beneficiary plans to attend college, pursue a technical credential, or return to school later in life to upskill, a 529 can help support that journey.
More Flexibility, Same Smart Benefits
Even with this added flexibility, the core benefits of a 529 remain the same:
- Tax-deferred growth on your savings
- Tax-free withdrawals when used for qualified education expenses
- A wide range of eligible education paths
For New Mexico families, The Education Plan offers even more value, with state tax advantages designed to help your savings go further over time.
A 529 for All Kinds of Education Goals
From kindergarten through career, and now credentials in between, a 529 is about flexibility and keeping educational doors open.
By saving today, you give your loved one more options tomorrow, no matter how their education and career path unfolds.
Ready to get started? You can set up an account in just 15 minutes.
This information is for general educational purposes and should not be considered financial advice or tax advice. We recommend consulting with a tax professional or financial advisor for personalized guidance.
*For full details on qualified credentialing expenses, visit https://www.irs.gov/taxtopics/tc313.
For years, 529 education savings plans have been best known as a smart way to save for college. But education doesn’t always follow a traditional four-year path, and recent updates have made 529 plans increasingly flexible to suit a wide variety of educational options.
Thanks to a recent update to federal law, certain credentialing and professional certification expenses are now included as 529 qualified education expenses. That’s great news for savers, and it makes a 529 plan like The Education Plan® even more flexible and practical for today’s learners.
What’s New: Credentialing Is Now a Qualified Expense
As of July 2025, certain credentialing and professional certification programs are now considered qualified education expenses. This means your 529 can now help pay for career-focused programs and credentials that are officially recognized and regulated.
To qualify, the program or credential must meet federal recognition standards, such as being:
- Listed on an approved state or federal directory, including
- State workforce training lists under the Workforce Innovation and Opportunity Act (WIOA)
- The U.S. Department of Veterans Affairs’ WEAMS directory
- Designed to prepare students for a recognized certification exam, where
- The exam is required to earn or maintain the credential, and
- The credentialing organization recognizes the program as valid preparation
- Identified by the U.S. Department of the Treasury, in consultation with the U.S. Department of Labor, as a reputable credentialing program
In addition, the credential itself must be officially recognized. Eligible credentials may include:
- Industry-recognized certifications, such as those
- Issued by programs accredited by organizations like the Institute for Credentialing Excellence, the National Commission on Certifying Agencies (NCCA), or the American National Standards Institute (ANSI)
- Listed in the Department of Defense’s Credentialing Opportunities On-Line (COOL) directory
- Registered apprenticeships, certified by the U.S. Department of Labor
- Occupational or professional licenses issued or recognized by a state or the federal government
- Other recognized postsecondary credentials defined under federal workforce laws and offered through approved programs
While the details matter behind the scenes, the big takeaway is simple:
If a credential or program is officially recognized and designed to prepare someone for work in a specific field, a 529 may now help cover the cost.*
This expansion makes a 529 plan more flexible than ever. It can support not just K-12 and post-secondary degrees, but the many education and training paths people take to build meaningful careers, at any stage in one’s career.*
Why This Matters for Families and Learners
Education today looks different than it did a generation ago. Many careers rely on:
- Industry certifications
- Occupational licenses
- Short-term training programs
- Continuing education to stay current
By expanding qualified expenses, 529 plans now better reflect how people actually learn, train, and advance in their careers. Whether your beneficiary plans to attend college, pursue a technical credential, or return to school later in life to upskill, a 529 can help support that journey.
More Flexibility, Same Smart Benefits
Even with this added flexibility, the core benefits of a 529 remain the same:
- Tax-deferred growth on your savings
- Tax-free withdrawals when used for qualified education expenses
- A wide range of eligible education paths
For New Mexico families, The Education Plan offers even more value, with state tax advantages designed to help your savings go further over time.
A 529 for All Kinds of Education Goals
From kindergarten through career, and now credentials in between, a 529 is about flexibility and keeping educational doors open.
By saving today, you give your loved one more options tomorrow, no matter how their education and career path unfolds.
Ready to get started? You can set up an account in just 15 minutes.
This information is for general educational purposes and should not be considered financial advice or tax advice. We recommend consulting with a tax professional or financial advisor for personalized guidance.
*For full details on qualified credentialing expenses, visit https://www.irs.gov/taxtopics/tc313.
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
