529 College Savings Plans

The 529 college savings plan is named after section 529 of the Internal Revenue Code and is legally known as a “qualified tuition plan.” What they qualify for is exemption from federal taxes on earnings and withdrawals if the plans are used for qualified education expenses. Qualified expenses include tuition, school fees, books, school supplies, school equipment, such as computers, reasonable room and board expenses (for those students attending school at least half-time), and other expenses associated with special needs services if the beneficiary is a special needs student. The funds in 529 plans can only be used for higher education. They are not designed for primary or secondary education.

There are two type