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529 Plan Now Empowers Families to Fund Tutoring and Test Prep

Written By Jason Robinovitz

For decades, 529 plans have helped families save for college by offering tax-free growth on investments, provided the money is used for qualified educational expenses. Until recently, however, families with K–12 students had limited options when it came to using 529 funds—especially for tutoring or test preparation services.

That changed in July 2025, when the One Big Beautiful Bill Act (OBBBA) became law. That legislation represents a major expansion of allowable 529 plan uses, especially for K–12 students. Most notably, families can now use 529 savings to pay for tutoring and academic enrichment programs, including test prep and executive function coaching, provided certain criteria are met.

Below, we break down how these recent changes offer opportunities for families—and how students working with qualified tutoring services like Score At The Top can benefit.

What’s New: 529 Plans Can Now Cover More K–12 Expenses

Historically, federal law allowed families to use 529 funds for K–12 tuition only—up to $10,000 per student per year. Other valuable educational supports such as tutoring, books, or online courses were not considered qualified expenses. As of July 5, 2025, that restriction has lifted significantly.

Expanded List of Qualified K–12 Expenses (Effective July 2025)

Under the new federal law, families can use 529 plan funds for:

  • Tutoring and academic enrichment programs

  • Standardized test prep courses and testing fees (e.g. SAT, ACT, AP exams)

  • Curriculum and learning materials, including textbooks and online educational tools

  • Credit recovery courses and supplemental instruction

  • Educational therapies for students with special needs

  • Dual enrollment course costs

These new eligible expenses provide far more flexibility in how 529 accounts can support a child’s academic journey — well beyond the classroom.

Tutoring and Test Prep: Now a Tax-Free Use of 529 Funds

Who Qualifies as a Tutor or Educational Provider?

To ensure proper use, the law sets basic qualifications for any tutoring provider:

  • The tutor cannot be a relative of the student

  • The tutor must be a qualified educator or subject-matter expert, such as:

    • A licensed teacher

    • A current or former teacher at an eligible school

    • A recognized subject-matter expert in the field of instruction

Score At The Top’s educators — who include teachers and subject-matter experts — meet these federal qualifications. This means families can confidently use 529 funds to pay for Score At The Top services without jeopardizing the plan’s tax-advantaged status.

Practical Applications: How Families Can Use 529s with Score At The Top

Families now have new, tax-smart ways to fund services that were previously out-of-pocket expenses. Here’s how the 2025 changes make a difference:

1. Test Prep Programs (SAT, ACT, AP Exams)

Score At The Top offers industry-leading test prep designed to help students boost scores — and now those programs can be paid for with 529 funds. Whether it’s one-on-one ACT tutoring or an intensive SAT course, these are now federally qualified expenses under the new law.

2. Academic Tutoring in Core Subjects

Struggling with AP Calculus? Need to reinforce foundational writing or math skills? Personalized tutoring with our expert instructors can now be covered with 529 money.

3. Credit Recovery and Course Remediation

Our accredited private school and a la carte credit recovery courses help students regain their academic footing—and are now eligible for tax-free 529 withdrawals.

4. Executive Function Coaching and Enrichment

Score At The Top’s executive function coaching helps students improve time management, organization, and study habits—critical skills for academic success. With the new law, families can now apply 529 funds to these services, provided the coach meets the educator qualifications (ours do).

Important Limits and Guidelines for 2025–2026

While the list of eligible K–12 expenses has expanded, some important limitations and compliance rules still apply:

  • Annual Withdrawal Cap:

    • For 2025, there’s a $10,000 annual cap on 529 withdrawals for any K–12 expenses, including tutoring.

    • Starting January 1, 2026, this cap doubles to $20,000 per student per year.

  • Documentation Requirements:

    • Families should keep receipts and records showing:

      • The tutor’s qualifications (e.g. resume or certification)

      • Proof of payment

      • Description of the services provided (test prep, tutoring, etc.)

  • State-Specific Rules:

    • While these changes apply at the federal level, some states may impose their own restrictions or recapture rules for non-college uses. Families should check with their 529 plan administrator or tax advisor for state-specific guidance.

Why This Matters for College-Bound Students

Tutoring and test prep aren't luxuries — they’re often the difference between a good application and a great one. With selective colleges placing significant weight on academic performance and standardized test scores, families are increasingly turning to expert support to help their students stand out.

The 2025 federal updates to 529 plans acknowledge this reality and give families a tax-advantaged way to invest in services that directly improve academic outcomes and college readiness.

Final Thoughts: A New Era for Education Savings

The expansion of 529 plan flexibility marks a significant win for families who believe in personalized, high-quality educational support. Whether it’s preparing for the SAT, catching up in Algebra, or strengthening executive functioning skills, these services can now be paid for tax-free—a major financial benefit.

At Score At The Top, we’ve been delivering these services for over 40 years. And now, we’re ready to help families strategically use their 529 plans to fund the support their students need—from kindergarten through college admissions.

If you're ready to explore how 529 funds can be used for tutoring or test prep with us, we invite you to reach out. Let's make every education dollar work harder—for your student’s success.

For more information about recent 529 changes, visit:

Learn more about our tutoring, test prep, and college planning services at:
https://www.scoreatthetop.com

Jason Robinovitz

As an active member of the Independent Educational Consultants Association, the National Association for College Admission Counseling, and the Secondary School Admission Test Board, Jason Robinovitz is part of a professional network of admission directors, educators, psychologists and other educational consultants. Additionally, Jason is a founding member of the National Test Prep Association, the first non-profit industry group for test prep professional nationwide.

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