26 U.S.C. § 529 | Qualified tuition programs

(a)

General rule

A qualified tuition program shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such program shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).

(b)

Qualified tuition program

For purposes of this section—

(1)

In general

The term “qualified tuition program” means a program established and maintained by a State or agency or instrumentality thereof or by 1 or more eligible educational institutions—

(A)

under which a person—

(i)

may purchase tuition credits or certificates on behalf of a designated beneficiary which entitle the beneficiary to the waiver or payment of qualified higher education expenses of the beneficiary, or

(ii)

in the case of a program established and maintained by a State or agency or instrumentality thereof, may make contributions to an account which is established for the purpose of meeting the qualified higher education expenses of the designated beneficiary of the account, and

(B)

which meets the other requirements of this subsection.

Except to the extent provided in regulations, a program established and maintained by 1 or more eligible educational institutions shall not be treated as a qualified tuition program unless such program provides that amounts are held in a qualified trust and such program has received a ruling or determination that such program meets the applicable requirements for a qualified tuition program. For purposes of the preceding sentence, the term “qualified trust” means a trust which is created or organized in the United States for the exclusive benefit of designated beneficiaries and with respect to which the requirements of paragraphs (2) and (5) of section 408(a) are met.

(2)

Cash contributions

A program shall not be treated as a qualified tuition program unless it provides that purchases or contributions may only be made in cash.

(3)

Separate accounting

A program shall not be treated as a qualified tuition program unless it provides separate accounting for each designated beneficiary.

(4)

Limited investment direction

A program shall not be treated as a qualified tuition program unless it provides that any contributor to, or designated beneficiary under, such program may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.

(5)

No pledging of interest as security

A program shall not be treated as a qualified tuition program if it allows any interest in the program or any portion thereof to be used as security for a loan.

(6)

Prohibition on excess contributions

A program shall not be treated as a qualified tuition program unless it provides adequate safeguards to prevent contributions on behalf of a designated beneficiary in excess of those necessary to provide for the qualified higher education expenses of the beneficiary.

(c)

Tax treatment of designated beneficiaries and contributors

(1)

In general

Except as otherwise provided in this subsection, no amount shall be includible in gross income of—

(A)

a designated beneficiary under a qualified tuition program, or

(B)

a contributor to such program on behalf of a designated beneficiary,

with respect to any distribution or earnings under such program.

(2)

Gift tax treatment of contributions

For purposes of chapters 12 and 13—

(A)

In general

Any contribution to a qualified tuition program on behalf of any designated beneficiary—

(i)

shall be treated as a completed gift to such beneficiary which is not a future interest in property, and

(ii)

shall not be treated as a qualified transfer under section 2503(e).

(B)

Treatment of excess contributions

If the aggregate amount of contributions described in subparagraph (A) during the calendar year by a donor exceeds the limitation for such year under section 2503(b), such aggregate amount shall, at the election of the donor, be taken into account for purposes of such section ratably over the 5-year period beginning with such calendar year.

(3)

Distributions

(A)

In general

Any distribution under a qualified tuition program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.

(B)

Distributions for qualified higher education expenses

For purposes of this paragraph—

(i)

In-kind distributions

No amount shall be includible in gross income under subparagraph (A) by reason of a distribution which consists of providing a benefit to the distributee which, if paid for by the distributee, would constitute payment of a qualified higher education expense.

(ii)

Cash distributions

In the case of distributions not described in clause (i), if—

(I)

such distributions do not exceed the qualified higher education expenses (reduced by expenses described in clause (i)), no amount shall be includible in gross income, and

(II)

in any other case, the amount otherwise includible in gross income shall be reduced by an amount which bears the same ratio to such amount as such expenses bear to such distributions.

(iii)

Exception for institutional programs

January 1, 2004In the case of any taxable year beginning before , clauses (i) and (ii) shall not apply with respect to any distribution during such taxable year under a qualified tuition program established and maintained by 1 or more eligible educational institutions.

(iv)

Treatment as distributions

Any benefit furnished to a designated beneficiary under a qualified tuition program shall be treated as a distribution to the beneficiary for purposes of this paragraph.

(v)

Coordination with American Opportunity and Lifetime Learning credits

The total amount of qualified higher education expenses with respect to an individual for the taxable year shall be reduced—

(I)

as provided in section 25A(g)(2), and

(II)

by the amount of such expenses which were taken into account in determining the credit allowed to the taxpayer or any other person under section 25A.

(vi)

Coordination with Coverdell education savings accounts

If, with respect to an individual for any taxable year—

(I)

the aggregate distributions to which clauses (i) and (ii) and section 530(d)(2)(A) apply, exceed

(II)

the total amount of qualified higher education expenses otherwise taken into account under clauses (i) and (ii) (after the application of clause (v)) for such year,

the taxpayer shall allocate such expenses among such distributions for purposes of determining the amount of the exclusion under clauses (i) and (ii) and section 530(d)(2)(A).

(C)

Change in beneficiaries or programs

(i)

Rollovers

Subparagraph (A) shall not apply to that portion of any distribution which, within 60 days of such distribution, is transferred—

(I)

to another qualified tuition program for the benefit of the designated beneficiary,

(II)

to the credit of another designated beneficiary under a qualified tuition program who is a member of the family of the designated beneficiary with respect to which the distribution was made, or

(III)

to an ABLE account (as defined in section 529A(e)(6)) of the designated beneficiary or a member of the family of the designated beneficiary.

Subclause (III) shall not apply to so much of a distribution which, when added to all other contributions made to the ABLE account for the taxable year, exceeds the limitation under section 529A(b)(2)(B)(i).

(ii)

Change in designated beneficiaries

Any change in the designated beneficiary of an interest in a qualified tuition program shall not be treated as a distribution for purposes of subparagraph (A) if the new beneficiary is a member of the family of the old beneficiary.

(iii)

Limitation on certain rollovers

Clause (i)(I) shall not apply to any transfer if such transfer occurs within 12 months from the date of a previous transfer to any qualified tuition program for the benefit of the designated beneficiary.

(D)

Special rule for contributions of refunded amounts

In the case of a beneficiary who receives a refund of any qualified higher education expenses from an eligible educational institution, subparagraph (A) shall not apply to that portion of any distribution for the taxable year which is recontributed to a qualified tuition program of which such individual is a beneficiary, but only to the extent such recontribution is made not later than 60 days after the date of such refund and does not exceed the refunded amount.

(E)

Special rollover to roth iras from long-term qualified tuition programs

(i)

In general

In the case of a distribution from a qualified tuition program of a designated beneficiary which has been maintained for the 15-year period ending on the date of such distribution, subparagraph (A) shall not apply to so much the portion of such distribution which—

(I)

does not exceed the aggregate amount contributed to the program (and earnings attributable thereto) before the 5-year period ending on the date of the distribution, and

(II)

is paid in a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of such designated beneficiary.

(ii)

Limitations

(I)

Annual limitation

Clause (i) shall only apply to so much of any distribution as does not exceed the amount applicable to the designated beneficiary under section 408A(c)(2) for the taxable year (reduced by the amount of aggregate contributions made during the taxable year to all individual retirement plans maintained for the benefit of the designated beneficiary).

(II)

Aggregate limitation

This subparagraph shall not apply to any distribution described in clause (i) to the extent that the aggregate amount of such distributions with respect to the designated beneficiary for such taxable year and all prior taxable years exceeds $35,000.

(4)

Estate tax treatment

(A)

In general

No amount shall be includible in the gross estate of any individual for purposes of chapter 11 by reason of an interest in a qualified tuition program.

(B)

Amounts includible in estate of designated beneficiary in certain cases

Subparagraph (A) shall not apply to amounts distributed on account of the death of a beneficiary.

(C)

Amounts includible in estate of donor making excess contributions

In the case of a donor who makes the election described in paragraph (2)(B) and who dies before the close of the 5-year period referred to in such paragraph, notwithstanding subparagraph (A), the gross estate of the donor shall include the portion of such contributions properly allocable to periods after the date of death of the donor.

(5)

Other gift tax rules

For purposes of chapters 12 and 13—

(A)

Treatment of distributions

Except as provided in subparagraph (B), in no event shall a distribution from a qualified tuition program be treated as a taxable gift.

(B)

Treatment of designation of new beneficiary

The taxes imposed by chapters 12 and 13 shall apply to a transfer by reason of a change in the designated beneficiary under the program (or a rollover to the account of a new beneficiary) unless the new beneficiary is—

(i)

assigned to the same generation as (or a higher generation than) the old beneficiary (determined in accordance with section 2651), and

(ii)

a member of the family of the old beneficiary.

(6)

Additional tax

January 1, 2004The tax imposed by section 530(d)(4) shall apply to any payment or distribution from a qualified tuition program in the same manner as such tax applies to a payment or distribution from a Coverdell education savings account. This paragraph shall not apply to any payment or distribution in any taxable year beginning before , which is includible in gross income but used for qualified higher education expenses of the designated beneficiary.

(7)

Treatment of elementary and secondary tuition

Any reference in this section to the term “qualified higher education expense” shall include a reference to the following expenses in connection with enrollment or attendance at, or for students enrolled at or attending, an elementary or secondary public, private, or religious school:

(A)

Tuition.

(B)

Curriculum and curricular materials.

(C)

Books or other instructional materials.

(D)

Online educational materials.

(E)

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.

(F)

Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission.

(G)

Fees for dual enrollment in an institution of higher education.

(H)

Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies.

(8)

Treatment of certain expenses associated with registered apprenticeship programs

29 U.S.C. 50Any reference in this subsection to the term “qualified higher education expense” shall include a reference to expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act ().

(9)

Treatment of qualified education loan repayments

(A)

In general

Any reference in this subsection to the term “qualified higher education expense” shall include a reference to amounts paid as principal or interest on any qualified education loan (as defined in section 221(d)) of the designated beneficiary or a sibling of the designated beneficiary.

(B)

Limitation

The amount of distributions treated as a qualified higher education expense under this paragraph with respect to the loans of any individual shall not exceed $10,000 (reduced by the amount of distributions so treated for all prior taxable years).

(C)

Special rules for siblings of the designated beneficiary

(i)

Separate accounting

For purposes of subparagraph (B) and subsection (d), amounts treated as a qualified higher education expense with respect to the loans of a sibling of the designated beneficiary shall be taken into account with respect to such sibling and not with respect to such designated beneficiary.

(ii)

Sibling defined

For purposes of this paragraph, the term “sibling” means an individual who bears a relationship to the designated beneficiary which is described in section 152(d)(2)(B).

(d)

Reports

(1)

In general

Each officer or employee having control of the qualified tuition program or their designee shall make such reports regarding such program to the Secretary and to designated beneficiaries with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this paragraph shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.

(2)

Rollover distributions

In the case of any distribution described in subsection (c)(3)(E), the officer or employee having control of the qualified tuition program (or their designee) shall provide a report to the trustee of the Roth IRA to which the distribution is made. Such report shall be filed at such time and in such manner as the Secretary may require and shall include information with respect to the contributions, distributions, and earnings of the qualified tuition program as of the date of the distribution described in subsection (c)(3)(A), together with such other matters as the Secretary may require.

(e)

Other definitions and special rules

For purposes of this section—

(1)

Designated beneficiary

The term “designated beneficiary” means—

(A)

the individual designated at the commencement of participation in the qualified tuition program as the beneficiary of amounts paid (or to be paid) to the program,

(B)

in the case of a change in beneficiaries described in subsection (c)(3)(C), the individual who is the new beneficiary, and

(C)

in the case of an interest in a qualified tuition program purchased by a State or local government (or agency or instrumentality thereof) or an organization described in section 501(c)(3) and exempt from taxation under section 501(a) as part of a scholarship program operated by such government or organization, the individual receiving such interest as a scholarship.

(2)

Member of family

The term “member of the family” means, with respect to any designated beneficiary—

(A)

the spouse of such beneficiary;

(B)

an individual who bears a relationship to such beneficiary which is described in subparagraphs (A) through (G) of section 152(d)(2);

(C)

the spouse of any individual described in subparagraph (B); and

(D)

any first cousin of such beneficiary.

(3)

Qualified higher education expenses

(A)

In general

The term “qualified higher education expenses” means—

(i)

tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution,

(ii)

expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance, and

(iii)

expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B)), computer software (as defined in section 197(e)(3)(B)), or Internet access and related services, if such equipment, software, or services are to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution.

Clause (iii) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. The amount of cash distributions from all qualified tuition programs described in subsection (b)(1)(A)(ii) with respect to a beneficiary during any taxable year shall, in the aggregate, include not more than $20,000 in expenses described in subsection (c)(7) incurred during the taxable year.

(B)

Room and board included for students who are at least half-time

(i)

In general

In the case of an individual who is an eligible student (as defined in section 25A(b)(3)) for any academic period, such term shall also include reasonable costs for such period (as determined under the qualified tuition program) incurred by the designated beneficiary for room and board while attending such institution. For purposes of subsection (b)(6), a designated beneficiary shall be treated as meeting the requirements of this clause.

(ii)

Limitation

The amount treated as qualified higher education expenses by reason of clause (i) shall not exceed—

(I)

20 U.S.C. 1087ll the allowance (applicable to the student) for room and board included in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965 (), as in effect on the date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001) as determined by the eligible educational institution for such period, or

(II)

if greater, the actual invoice amount the student residing in housing owned or operated by the eligible educational institution is charged by such institution for room and board costs for such period.

(C)

Certain postsecondary credentialing expenses

The term “qualified higher education expenses” includes qualified postsecondary credentialing expenses (as defined in subsection (f)).

(4)

Application of section 514

An interest in a qualified tuition program shall not be treated as debt for purposes of section 514.

(5)

Eligible educational institution

The term “eligible educational institution” means an institution—

(A)

20 U.S.C. 1088 which is described in section 481 of the Higher Education Act of 1965 (), as in effect on the date of the enactment of this paragraph, and

(B)

which is eligible to participate in a program under title IV of such Act.

(f)

Qualified postsecondary credentialing expenses

For purposes of this section—

(1)

In general

The term “qualified postsecondary credentialing expenses” means—

(A)

tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary in a recognized postsecondary credential program, or any other expense incurred in connection with enrollment in or attendance at a recognized postsecondary credential program if such expense would, if incurred in connection with enrollment or attendance at an eligible educational institution, be covered under subsection (e)(3)(A),

(B)

fees for testing if such testing is required to obtain or maintain a recognized postsecondary credential, and

(C)

fees for continuing education if such education is required to maintain a recognized postsecondary credential.

(2)

Recognized postsecondary credential program

The term “recognized postsecondary credential program” means any program to obtain a recognized postsecondary credential if—

(A)

29 U.S.C. 3152(d) such program is included on a State list prepared under section 122(d) of the Workforce Innovation and Opportunity Act (),

(B)

such program is listed in the public directory of the Web Enabled Approval Management System (WEAMS) of the Veterans Benefits Administration, or successor directory such program,

(C)

an examination (developed or administered by an organization widely recognized as providing reputable credentials in the occupation) is required to obtain or maintain such credential and such organization recognizes such program as providing training or education which prepares individuals to take such examination, or

(D)

such program is identified by the Secretary, after consultation with the Secretary of Labor, as being a reputable program for obtaining a recognized postsecondary credential for purposes of this subparagraph.

(3)

Recognized postsecondary credential

The term “recognized postsecondary credential” means—

(A)

any postsecondary employment credential that is industry recognized and is—

(i)

any postsecondary employment credential issued by a program that is accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies, or the American National Standards Institute,

(ii)

any postsecondary employment credential that is included in the Credentialing Opportunities On-Line (COOL) directory of credentialing programs (or successor directory) maintained by the Department of Defense or by any branch of the Armed Forces, or

(iii)

any postsecondary employment credential identified for purposes of this clause by the Secretary, after consultation with the Secretary of Labor, as being industry recognized,

(B)

August 16, 193750 Stat. 664 29 U.S.C. 50 any certificate of completion of an apprenticeship that is registered and certified with the Secretary of Labor under the Act of (commonly known as the “National Apprenticeship Act”; , chapter 663; et seq.),

(C)

any occupational or professional license issued or recognized by a State or the Federal Government (and any certification that satisfies a condition for obtaining such a license), and

(D)

29 U.S.C. 3102(52) any recognized postsecondary credential as defined in section 3(52) of the Workforce Innovation and Opportunity Act (), provided through a program described in paragraph (2)(A).

(g)

Regulations

Notwithstanding any other provision of this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section and to prevent abuse of such purposes, including regulations under chapters 11, 12, and 13 of this title.

Pub. L. 104–188, title I, § 1806(a)Aug. 20, 1996110 Stat. 1895 Pub. L. 105–34, title II, § 211(a)Aug. 5, 1997111 Stat. 810 Pub. L. 105–206, title VI, § 6004(c)(2)July 22, 1998112 Stat. 793 Pub. L. 106–554, § 1(a)(7) [title III, § 319(5)]Dec. 21, 2000114 Stat. 2763 Pub. L. 107–16, title IV, § 402(a)(1)June 7, 2001115 Stat. 60–63 Pub. L. 107–22, § 1(b)(3)(C)July 26, 2001115 Stat. 197 Pub. L. 107–147, title IV, § 417(11)Mar. 9, 2002116 Stat. 56 Pub. L. 108–311, title II, § 207(21)Oct. 4, 2004118 Stat. 1178 Pub. L. 109–135, title IV, § 412(ee)(3)Dec. 21, 2005119 Stat. 2639 Pub. L. 109–280, title XIII, § 1304(b)Aug. 17, 2006120 Stat. 1110 Pub. L. 111–5, div. B, title I, § 1005(a)Feb. 17, 2009123 Stat. 316 Pub. L. 113–295, div. B, title I, § 105(a)Dec. 19, 2014128 Stat. 4064 Pub. L. 114–113, div. Q, title III, § 302(a)(1)Dec. 18, 2015129 Stat. 3086 Pub. L. 115–97, title IDec. 22, 2017131 Stat. 2076 Pub. L. 115–141, div. U, title I, § 101lMar. 23, 2018132 Stat. 1165 Pub. L. 116–94, div. O, title III, § 302(a)Dec. 20, 2019133 Stat. 3175 Pub. L. 117–328, div. T, title I, § 126(a)Dec. 29, 2022136 Stat. 5316 Pub. L. 119–21, title VIIJuly 4, 2025139 Stat. 167(Added , , ; amended , (b), (d), (e)(2)(A), title XVI, § 1601(h)(1)(A), (B), , , 812, 1092; , (3), , ; , , , 2763A–646; –(3), (4)(A), (C), (D), (b)(1), (c)–(g), , ; , , ; , , ; , title IV, § 406(a), , , 1189; , , ; , , ; , , ; , , ; , (b)(1), (c)(1), , ; , §§ 11025(a), 11032(a), , , 2081; ()(15), title IV, § 401(a)(127), (128), , , 1190; , (b)(1), , ; , (c), , , 5317; , §§ 70117(a), 70413(a)(1), (b)(1), 70414(a), (b), , , 218, 219.)

Editorial Notes

References in Text

Pub. L. 107–16June 7, 2001The date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, referred to in subsec. (e)(3)(B)(ii)(I), is the date of enactment of , which was approved .

Pub. L. 105–34Aug. 5, 1997The date of the enactment of this paragraph, referred to in subsec. (e)(5)(A), probably means the date of enactment of , which enacted subsec. (e)(5) and which was approved .

Pub. L. 89–329Nov. 8, 196579 Stat. 1219 section 1001 of Title 20The Higher Education Act of 1965, referred to in subsec. (e)(5), is , , . Title IV of the Act is classified generally to subchapter IV (§ 1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

act Aug. 16, 1937, ch. 663 50 Stat. 664 section 50 of Title 29The National Apprenticeship Act, referred to in subsec. (f)(3)(B), is , , which is classified generally to chapter 4C (§ 50 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Amendments

Pub. L. 119–21, § 70117(a)January 1, 20262025—Subsec. (c)(3)(C)(i)(III). , struck out “before ,” before “to an ABLE account”.

Pub. L. 119–21, § 70413(a)(1)Subsec. (c)(7). , amended par. (7) generally. Prior to amendment, text read as follows: “Any reference in this subsection to the term ‘qualified higher education expense’ shall include a reference to expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.”

Pub. L. 119–21, § 70413(b)(1)Subsec. (e)(3)(A). , which directed that the “last sentence of section 529(e)(3)” be amended by substituting “$20,000” for “$10,000”, was executed by making the substitution in the concluding provisions of subpar. (A) of par. (3), to reflect the probable intent of Congress.

Pub. L. 119–21, § 70414(a)Subsec. (e)(3)(C). , added subpar. (C).

Pub. L. 119–21, § 70414(b)Subsecs. (f), (g). , added subsec. (f) and redesignated former subsec. (f) as (g).

Pub. L. 117–328, § 126(a)2022—Subsec. (c)(3)(E). , added subpar. (E).

Pub. L. 117–328, § 126(c)Subsec. (d). , designated existing provisions as par. (1), inserted heading, substituted “by this paragraph” for “by this subsection”, and added par. (2).

Pub. L. 116–94, § 302(a)2019—Subsec. (c)(8). , added par. (8).

Pub. L. 116–94, § 302(b)(1)Subsec. (c)(9). , added par. (9).

Pub. L. 115–141, § 101l2018—Subsec. (c)(3)(B)(v). ()(15), substituted “American Opportunity” for “Hope” in heading.

Pub. L. 115–141, § 401(a)(127)Subsec. (c)(6). , substituted “a Coverdell” for “an Coverdell”.

Pub. L. 115–141, § 401(a)(128)Subsec. (e)(3)(A). , substituted comma for semicolon at end of cl. (i) and inserted “, and” at end of cl. (ii).

Pub. L. 115–97, § 11025(a)2017—Subsec. (c)(3)(C)(i). , added subcl. (III) and inserted concluding provisions.

Pub. L. 115–97, § 11032(a)(1)Subsec. (c)(7). , added par. (7).

Pub. L. 115–97, § 11032(a)(2)Subsec. (e)(3)(A). , inserted at end of concluding provisions “The amount of cash distributions from all qualified tuition programs described in subsection (b)(1)(A)(ii) with respect to a beneficiary during any taxable year shall, in the aggregate, include not more than $10,000 in expenses described in subsection (c)(7) incurred during the taxable year.”

Pub. L. 114–113, § 302(c)(1)2015—Subsec. (c)(3)(D). , added subpar. (D).

Pub. L. 114–113, § 302(b)(1), struck out subpar. (D). Text read as follows: “For purposes of applying section 72—

“(i) to the extent provided by the Secretary, all qualified tuition programs of which an individual is a designated beneficiary shall be treated as one program,

“(ii) except to the extent provided by the Secretary, all distributions during a taxable year shall be treated as one distribution, and

“(iii) except to the extent provided by the Secretary, the value of the contract, income on the contract, and investment in the contract shall be computed as of the close of the calendar year in which the taxable year begins.”

Pub. L. 114–113, § 302(a)(1)Subsec. (e)(3)(A)(iii). , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “expenses paid or incurred in 2009 or 2010 for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary’s family during any of the years the beneficiary is enrolled at an eligible educational institution.”

Pub. L. 113–2952014—Subsec. (b)(4). substituted “Limited” for “No” in heading and “may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.” for “may not directly or indirectly direct the investment of any contributions to the program (or any earnings thereon).” in text.

Pub. L. 111–52009—Subsec. (e)(3)(A). added cl. (iii) and concluding provisions.

Pub. L. 109–2802006—Subsec. (f). , which directed the addition of subsec. (f) to section 529, without specifying the act to be amended, was executed by making the addition to this section, which is section 529 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.

Pub. L. 109–1352005—Subsec. (c)(6). substituted “Coverdell education savings account” for “education individual retirement account”.

Pub. L. 108–311, § 406(a)2004—Subsec. (c)(5)(B). , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The taxes imposed by chapters 12 and 13 shall apply to a transfer by reason of a change in the designated beneficiary under the program (or a rollover to the account of a new beneficiary) only if the new beneficiary is a generation below the generation of the old beneficiary (determined in accordance with section 2651).”

Pub. L. 108–311, § 207(21)Subsec. (e)(2)(B). , substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.

Pub. L. 107–1472002—Subsec. (e)(3)(B)(i). substituted “subsection (b)(6)” for “subsection (b)(7)”.

Pub. L. 107–16, § 402(a)(4)(D)2001—, struck out “State” before “tuition” in section catchline.

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (a). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(a)(4)(C)Subsec. (b). , substituted “Qualified tuition” for “Qualified State tuition” in heading.

Pub. L. 107–16, § 402(a)(1)Subsec. (b)(1). , (4)(A), in introductory provisions, substituted “qualified tuition” for “qualified State tuition” and inserted “or by 1 or more eligible educational institutions” after “thereof”, and added concluding provisions.

Pub. L. 107–16, § 402(a)(2)Subsec. (b)(1)(A)(ii). , inserted “in the case of a program established and maintained by a State or agency or instrumentality thereof,” before “may make”.

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (b)(2). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(a)(3)(A)Subsec. (b)(3) to (7). , (4)(A), redesignated pars. (4) to (7) as (3) to (6), respectively, substituted “qualified tuition” for “qualified State tuition” wherever appearing, and struck out heading and text of former par. (3). Text read as follows: “A program shall not be treated as a qualified State tuition program unless it imposes a more than de minimis penalty on any refund of earnings from the account which are not—

“(A) used for qualified higher education expenses of the designated beneficiary,

“(B) made on account of the death or disability of the designated beneficiary, or

“(C) made on account of a scholarship (or allowance or payment described in section 135(d)(1)(B) or (C)) received by the designated beneficiary to the extent the amount of the refund does not exceed the amount of the scholarship, allowance, or payment.”

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (c)(1)(A), (3)(A). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(b)(1)Subsec. (c)(3)(B). , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “Any benefit furnished to a designated beneficiary under a qualified tuition program shall be treated as a distribution to the beneficiary.”

Pub. L. 107–16, § 402(a)(4)(A), substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–22Subsec. (c)(3)(B)(vi). substituted “Coverdell education savings” for “education individual retirement” in heading.

Pub. L. 107–16, § 402(c)(3)Subsec. (c)(3)(C). , inserted “or programs” after “beneficiaries” in heading.

Pub. L. 107–16, § 402(c)(1)Subsec. (c)(3)(C)(i). , substituted “transferred—” for “transferred”, added subcl. (I), and designated existing provisions “to the credit” as subcl. (II).

Pub. L. 107–16, § 402(a)(4)(A), substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (c)(3)(C)(ii). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(c)(2)Subsec. (c)(3)(C)(iii). , added cl. (iii).

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (c)(3)(D)(i). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(g)(1)Subsec. (c)(3)(D)(ii). , inserted “except to the extent provided by the Secretary,” before “all distributions”.

Pub. L. 107–16, § 402(g)(2)Subsec. (c)(3)(D)(iii). , inserted “except to the extent provided by the Secretary,” before “the value”.

Pub. L. 107–16, § 402(a)(3)(B)Subsec. (c)(6). , added par. (6).

Pub. L. 107–16, § 402(a)(4)(A)Subsecs. (d), (e)(1)(A), (C). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(d)Subsec. (e)(2)(D). , added subpar. (D).

Pub. L. 107–16, § 402(f)Subsec. (e)(3)(A). , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘qualified higher education expenses’ means tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution.”

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (e)(3)(B)(i). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 107–16, § 402(e)20 U.S.C. 1087llSubsec. (e)(3)(B)(ii). , reenacted heading without change and amended text of cl. (ii) generally. Prior to amendment, text read as follows: “The amount treated as qualified higher education expenses by reason of the preceding sentence shall not exceed the minimum amount (applicable to the student) included for room and board for such period in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, , as in effect on the date of the enactment of this paragraph) for the eligible educational institution for such period.”

Pub. L. 107–16, § 402(a)(4)(A)Subsec. (e)(4). , substituted “qualified tuition” for “qualified State tuition”.

Pub. L. 106–5542000—Subsec. (e)(3)(B). struck out “under guaranteed plans” after “students” in heading.

Pub. L. 105–206, § 6004(c)(2)1998—Subsec. (c)(3)(A). , substituted “section 72” for “section 72(b)”.

Pub. L. 105–206, § 6004(c)(3)Subsec. (e)(2). , reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘member of the family’ means—

“(A) an individual who bears a relationship to another individual which is a relationship described in paragraphs (1) through (8) of section 152(a), and

“(B) the spouse of any individual described in subparagraph (A).”

Pub. L. 105–34, § 211(b)(4)1997—Subsec. (b)(5). , inserted “directly or indirectly” after “may not”.

Pub. L. 105–34, § 211(b)(3)(A)(i)Subsec. (c)(2). , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “In no event shall a contribution to a qualified State tuition program on behalf of a designated beneficiary be treated as a taxable gift for purposes of chapter 12.”

Pub. L. 105–34, § 211(d)Subsec. (c)(3)(A). , substituted “section 72(b)” for “section 72”.

Pub. L. 105–34, § 211(b)(3)(B)Subsec. (c)(4). , amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “The value of any interest in any qualified State tuition program which is attributable to contributions made by an individual to such program on behalf of any designated beneficiary shall be includible in the gross estate of the contributor for purposes of chapter 11.”

Pub. L. 105–34, § 211(b)(3)(A)(ii)Subsec. (c)(5). , amended heading and text of par. (5) generally. Prior to amendment, text read as follows: “For purposes of section 2503(e), the waiver (or payment to an educational institution) of qualified higher education expenses of a designated beneficiary under a qualified State tuition program shall be treated as a qualified transfer.”

Pub. L. 105–34, § 211(e)(2)(A)Subsec. (d). , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows:

Reporting Requirements.—“(d)

In general“(1) .—If there is a distribution to any individual with respect to an interest in a qualified State tuition program during any calendar year, each officer or employee having control of the qualified State tuition program or their designee shall make such reports as the Secretary may require regarding such distribution to the Secretary and to the designated beneficiary or the individual to whom the distribution was made. Any such report shall include such information as the Secretary may prescribe.

“(2) Timing of reports.—Any report required by this subsection—

“(A) shall be filed at such time and in such matter as the Secretary prescribes, and

“(B) shall be furnished to individuals not later than January 31 of the calendar year following the calendar year to which such report relates.”

Pub. L. 105–34, § 1601(h)(1)(A)Subsec. (e)(1)(B). , substituted “subsection (c)(3)(C)” for “subsection (c)(2)(C)”.

Pub. L. 105–34, § 1601(h)(1)(B)Subsec. (e)(1)(C). , inserted “(or agency or instrumentality thereof)” after “local government”.

Pub. L. 105–34, § 211(b)(1)Subsec. (e)(2). , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘member of the family’ has the same meaning given such term as section 2032A(e)(2).”

Pub. L. 105–34, § 211(a)Subsec. (e)(3). , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “The term ‘qualified higher education expenses’ means tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution (as defined in section 135(c)(3)).”

Pub. L. 105–34, § 211(b)(2)Subsec. (e)(5). , added par. (5).

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment

Pub. L. 119–21, title VII, § 70117(b)July 4, 2025139 Stat. 167

December 31, 2025“The amendment made by this section [amending this section] shall apply to taxable years beginning after .”

, , , provided that:

Pub. L. 119–21, title VII, § 70413(a)(2)July 4, 2025139 Stat. 219

July 4, 2025“The amendment made by this subsection [amending this section] shall apply to distributions made after the date of the enactment of this Act [].”

, , , provided that:

Pub. L. 119–21, title VII, § 70413(b)(2)July 4, 2025139 Stat. 219

December 31, 2025“The amendment made by this subsection [amending this section] shall apply to taxable years beginning after .”

, , , provided that:

Pub. L. 119–21, title VII, § 70414(c)July 4, 2025139 Stat. 221

July 4, 2025“The amendments made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [].”

, , , provided that:

Effective Date of 2022 Amendment

Pub. L. 117–328Dec. 31, 2023section 126(d) of Pub. L. 117–328 section 408A of this titleAmendment by applicable with respect to distributions after , see , set out as a note under .

Effective Date of 2019 Amendment

Pub. L. 116–94Dec. 31, 2018section 302(c) of Pub. L. 116–94 section 221 of this titleAmendment by applicable to distributions made after , see , set out as a note under .

Effective Date of 2018 Amendment

lPub. L. 115–141 Pub. L. 114–113 section 101(s) of Pub. L. 115–141 section 24 of this titleAmendment by section 101()(15) of effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of , to which such amendment relates, see , set out as a note under .

Effective Date of 2017 Amendment

Pub. L. 115–97, title I, § 11025(b)Dec. 22, 2017131 Stat. 2076

Dec. 22, 2017“The amendments made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [].”

, , , provided that:

Pub. L. 115–97, title I, § 11032(b)Dec. 22, 2017131 Stat. 2082

December 31, 2017“The amendments made by this section [amending this section] shall apply to distributions made after .”

, , , provided that:

Effective Date of 2015 Amendment

Pub. L. 114–113, div. Q, title III, § 302(a)(2)Dec. 18, 2015129 Stat. 3086

December 31, 2014“The amendment made by this subsection [amending this section] shall apply to taxable years beginning after .”

, , , provided that:

Pub. L. 114–113, div. Q, title III, § 302(b)(2)Dec. 18, 2015129 Stat. 3086

December 31, 2014“The amendment made by this subsection [amending this section] shall apply to distributions after .”

, , , provided that:

Pub. L. 114–113, div. Q, title III, § 302(c)(2)Dec. 18, 2015129 Stat. 3087

“(A)

In general .—

December 31, 2014The amendment made by this subsection [amending this section] shall apply with respect to refunds of qualified higher education expenses after .

“(B)

Transition rule .—

December 31, 2014Dec. 18, 2015Dec. 18, 2015In the case of a refund of qualified higher education expenses received after , and before the date of the enactment of this Act [], section 529(c)(3)(D) of the Internal Revenue Code of 1986 (as added by this subsection) shall be applied by substituting ‘not later than 60 days after the date of the enactment of this subparagraph []’ for ‘not later than 60 days after the date of such refund’.”

, , , provided that:

Effective Date of 2014 Amendment

Pub. L. 113–295, div. B, title I, § 105(b)Dec. 19, 2014128 Stat. 4064

December 31, 2014“The amendments made by this section [amending this section] shall apply to taxable years beginning after .”

, , , provided that:

Effective Date of 2009 Amendment

Pub. L. 111–5, div. B, title I, § 1005(b)Feb. 17, 2009123 Stat. 316

December 31, 2008“The amendments made by this section [amending this section] shall apply to expenses paid or incurred after .”

, , , provided that:

Effective Date of 2004 Amendment

section 207(21) of Pub. L. 108–311Dec. 31, 2004section 208 of Pub. L. 108–311 section 2 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

section 406(a) of Pub. L. 108–311 Pub. L. 105–34 section 406(h) of Pub. L. 108–311 section 55 of this titleAmendment by effective as if included in the provisions of the Taxpayer Relief Act of 1997, , to which such amendment relates, see , set out as a note under .

Effective Date of 2001 Amendments

Pub. L. 107–22July 26, 2001section 1(c) of Pub. L. 107–22 section 26 of this titleAmendment by effective , see , set out as a note under .

Pub. L. 107–16Dec. 31, 2001section 402(h) of Pub. L. 107–16 section 72 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date of 1998 Amendment

Pub. L. 105–206 Pub. L. 105–34 section 6024 of Pub. L. 105–206 section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, , to which such amendment relates, see , set out as a note under .

Effective Date of 1997 Amendment

Pub. L. 105–34, title II, § 211(f)Aug. 5, 1997111 Stat. 812

“(1)

In general .—

January 1, 1998Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 135 and 6693 of this title] shall take effect on .

“(2)

Expenses to include room and board .—

Pub. L. 104–188The amendment made by subsection (a) shall take effect as if included in the amendments made by section 1806 of the Small Business Job Protection Act of 1996 [].

“(3)

Eligible educational institution .—

December 31, 1997The amendment made by subsection (b)(2) [amending this section] shall apply to distributions after , with respect to expenses paid after such date (in taxable years ending after such date), for education furnished in academic periods beginning after such date.

“(4)

Coordination with education savings bonds .—

section 135 of this titleDecember 31, 1997The amendment made by subsection (c) [amending ] shall apply to taxable years beginning after .

“(5)

Estate and gift tax changes.—

“(A)

Gift tax changes .—

Aug. 5, 1997Paragraphs (2) and (5) of section 529(c) of the Internal Revenue Code of 1986, as amended by this section, shall apply to transfers (including designations of new beneficiaries) made after the date of the enactment of this Act [].

“(B)

Estate tax changes .—

June 8, 1997Paragraph (4) of such section 529(c) shall apply to estates of decedents dying after .

“(6)

august 20, 1996Transition rule for pre- contracts .—

August 20, 1996August 20, 1996In the case of any contract issued prior to , section 529(c)(3)(C) of the Internal Revenue Code of 1986 shall be applied for taxable years ending after , without regard to the requirement that a distribution be transferred to a member of the family or the requirement that a change in beneficiaries may be made only to a member of the family.”

, , , provided that:

Pub. L. 105–34 Pub. L. 104–188 section 1601(j) of Pub. L. 105–34 section 23 of this titleAmendment by section 1601(h)(1)(A), (B) of effective as if included in the provisions of the Small Business Job Protection Act of 1996, , to which it relates, see , set out as a note under .

Effective Date

Pub. L. 104–188, title I, § 1806(c)Aug. 20, 1996110 Stat. 1898 Pub. L. 105–34, title XVI, § 1601(h)(1)(C)Aug. 5, 1997111 Stat. 1092

“(1)

In general .—

section 135 of this titleAug. 20, 1996The amendments made by this section [enacting this section and amending ] shall apply to taxable years ending after the date of the enactment of this Act [].

“(2)

Transition rule .—

If—

“(A)

a State or agency or instrumentality thereof maintains, on the date of the enactment of this Act, a program under which persons may purchase tuition credits or certificates on behalf of, or make contributions for education expenses of, a designated beneficiary, and

“(B)

such program meets the requirements of a qualified State tuition program before the later of—

“(i)

the date which is 1 year after such date of enactment, or

“(ii)

the first day of the first calendar quarter after the close of the first regular session of the State legislature that begins after such date of enactment,

August 20, 1996then such program (as in effect on ) shall be treated as a qualified State tuition program with respect to contributions (and earnings allocable thereto) pursuant to contracts entered into under such program before the first date on which such program meets such requirements (determined without regard to this paragraph) and the provisions of such program (as so in effect) shall apply in lieu of section 529(b) of the Internal Revenue Code of 1986 with respect to such contributions and earnings.

For purposes of subparagraph (B)(ii), if a State has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.”

, , , as amended by , , , provided that: