529 plan calculator,
with the real 2026 rule changes.

Field guide

What actually changed for 529 plans in 2026.

The One Big Beautiful Bill Act (OBBBA), signed July 2025 and effective January 1, 2026, is the biggest expansion of 529 plan flexibility in years — genuinely new material most general financial advice hasn't caught up on yet.

K-12 withdrawals: bigger limit, much broader coverage

The annual K-12 withdrawal limit doubles from $10,000 to $20,000.00 per student. Qualified expenses expand well past tuition: curriculum materials, tutoring, standardized test fees, dual-enrollment courses, and educational therapies for students with disabilities are all newly covered.

The caveat that matters most: these are federal changes. Several states haven't conformed their own tax codes to the new categories, so a withdrawal that's federally tax-free under the expanded rules can still trigger state income tax depending on where your plan is held. Verify your specific state's conformity status before assuming a withdrawal is entirely tax-free — don't take a blanket "it's all tax-free now" at face value.

A new category: postsecondary credentials

529 funds can now cover registered apprenticeship program completions, occupational or professional licenses issued or recognized by a state or federal agency (plus the exam required to obtain one), and any credential recognized under the Workforce Innovation and Opportunity Act (WIOA) — a real expansion beyond traditional college for families whose kids may pursue a trade or licensed profession instead.

Superfunding: front-loading 5 years of gift-tax exclusion

A single donor can contribute 5× the year's annual gift-tax exclusion in one lump sum and elect (via IRS Form 709) to treat it as spread ratably over 5 years for gift-tax purposes. At 2026's $19,000 exclusion, that's $95,000.00 per donor per beneficiary — $190,000.00 for a married couple splitting gifts. The tradeoff: the election consumes that beneficiary's annual exclusion for the full 5-year window, so additional gifts to the same child during that period become reportable. The upside is real, though — money invested years earlier compounds for years longer, which the calculator's side-by-side scenario comparison above shows directly against steady monthly contributions.

What happens to funds you don't use

The old story — a flat 10% penalty on the earnings portion of any non-qualified withdrawal — is still true for a straight cash-out, but it's no longer the whole picture. SECURE 2.0 added a genuine escape hatch: up to $35,000.00 lifetime per beneficiary can roll directly into that beneficiary's own Roth IRA, tax- and penalty-free, subject to:

• The 529 account must have been open at least 15 years.
• The annual rollover amount is capped at that year's Roth IRA contribution limit ($7,500 under 50 / $8,600 at 50+ for 2026).
• A 5-year lookback excludes contributions (and their earnings) made in the 5 years before the rollover.
• The beneficiary needs earned income that year at least equal to the amount rolled over — same rule as any normal Roth contribution.
• It must be a direct trustee-to-trustee transfer.

This directly answers the most common objection to funding a 529 aggressively — "what if my kid gets a scholarship or doesn't go to college?" A meaningfully overfunded 529 no longer has to become a tax headache.

Why the taxable-brokerage comparison, and its honest limits

The calculator compares each scenario's 529 balance against what the identical contribution schedule would be worth in an ordinary taxable brokerage account, assuming the entire gain gets realized and taxed once, at withdrawal, at your chosen long-term capital-gains rate. This is the standard simplified comparison — it does not model the annual dividend and turnover tax drag a real taxable account would also incur, so if anything it understates the 529's true tax advantage, not overstates it.

Disclaimer

This calculator is a planning tool, not tax or financial advice. State conformity to the 2026 federal changes varies and this tool does not model any specific state's rules. Actual returns, inflation, and program-specific fees will vary from any fixed assumption. Consult your 529 plan administrator or a tax professional for your specific situation.