FAQs on Using 529 Plans
for Certification, Recertification & Continuing Education
As part of the Freedom to Invest in Tomorrow’s Workforce Act passed by Congress in July 2025, Section 529 of the Internal Revenue Code has been amended to add a new subsection on “qualified postsecondary credential expenses.” This means surgical technologists (and those preparing to enter the profession) can now use 529 funds to pay for expenses such as the CST or CSFA certification exam, renewal fees, and continuing education. For many, this makes pursuing and maintaining your credentials more affordable and accessible.
The details for how to apply these funds are being developed in each state and we will continue to provide up-to-date information on this page as it becomes available. If you have any questions, please contact your 529 provider.
In the meantime, below are answers to common questions about 529 Plans and the expansion to cover eligible post-secondary credentialing programs.
What is a 529 Plan?
A 529 Plan is a tax-advantaged savings account for education expenses. Contributions are made after-tax, but withdrawals for qualifying expenses are federally tax-free on any gains, with most states offering additional tax benefits. Anyone can open a 529 Plan and name any beneficiary, including themselves, with the option to change beneficiaries later. Funds can be used for pre-paid tuition or invested for future education costs. While nearly every state sponsors a 529 Plan, residency is typically not required to participate.
Can I lose my 529 funds if I don’t use them?
- 529 Plan funds won’t be lost if not used for college: People may be concerned about losing access to funding or tax benefits for funds not related to traditional uses for 529 Plans. With the expansion to credentialing programs, 529 Plans have more uses throughout an adult’s educational and credentialing progress throughout their career.
- 529 Plan Beneficiaries are Transferrable: 529 Plan beneficiaries can be changed so that funding can be directed to the education of someone else if the original beneficiary no longer has use for the 529 Plan funds.
How does the new law expand 529 Plans for Postsecondary Credentials?
The new law permits 529 plans to be used for qualified postsecondary credentialing expenses. These expenses include:
- Tuition, fees, books, supplies, equipment, and similar expenses required for the enrollment or attendance of a designated beneficiary in a recognized postsecondary credential program,
- Fees for testing if such testing is required to obtain or maintain a recognized postsecondary credential, and
- Fees for continuing education if such education is required to maintain a recognized postsecondary credential.
When does the 529 Plan expansion to postsecondary credentialing programs take effect?
The expansion of 529 Plans to post-secondary credentialing programs should be available immediately under the new law. Any withdrawals from a 529 Plan after July 4, 2025, for qualified expenses at an eligible postsecondary credential program will be eligible for the same favorable tax treatment as traditional uses. Because the law became effective immediately, some 529 Plans may still need to work out the implementation details, however. For any questions, please check with your 529 provider.
How can I use my 529 Plan funds for a credentialing program?
For 529 Plan holders, the first step in using your 529 Plan funds for a credentialing program is to contact your 529 Plan administrator. Ask if your 529 Plan has an option to make withdrawals to pay for qualified credentialing expenses.
Most states will already allow you to be reimbursed by your 529 Plan for qualified expenses made for credentialing programs. You may be asked to attest that the withdrawal is intended as a reimbursement for a qualified credentialing program expense. 529 Plan beneficiaries are encouraged to keep receipts and records related to any qualified credentialing expenses, in case of an IRS audit, and to consult with a tax professional to ensure withdrawals are made according to the requirements of 529 Plans.
What happens if my state is not ready to implement the 529 Plan expansion to credentialing programs?
While the largest state 529 program — Virginia’s Invest529 — has already operationalized the expansion (see https://www.invest529.com/529-basics/qualified-expenses/), some state 529 plans are still updating programs and systems to implement this expansion of 529 Plans. For some, the state law automatically tracks current federal tax law, so only an administrative process is needed to implement the expansion. But other states may have to pass state legislation to conform changes in the federal Internal Revenue Code into their own state laws.
If you have questions about the 529 programs in your state, please contact your 529 provider.
Source: Professional Certification Coalition