FAQs

Yep. You can use the funds in your account to help pay for computers, peripheral equipment (such as printers), software, or even internet access fees, so long as these tools and services are being predominantly used by the beneficiary while they’re enrolled at an eligible college or university.

Yes. You can use your account’s funds to pay for room and board expenses, but only for students who attend post-secondary schools (colleges, universities, etc.) at least half-time, and so long as the expenses don’t exceed the room and board allowance, determined by the school, that’s included in the cost of attendance.

Yes, you can use your account to pay for qualified expenses at some foreign schools, provided they are accredited and are eligible to participate in federal student aid programs. It’s best to contact your school directly to see if they qualify.

Qualified K-12 Expenses consisting of up to $10,000 per taxable year (increasing to $20,000 in 2026) of tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school as determined under applicable state law. The $10,000 (increasing to $20,000 in 2026) is an aggregate limit per student from all 529 accounts. Please note: withdrawals for Qualified K-12 Expenses are subject to Vermont State Tax Credit Recapture.

No. You can use the funds in your account to pay for qualified expenses at eligible institutions all over the U.S. and at some schools abroad.

Just about every public, private, or non-profit college, university or vocational school in the U.S. (and also some abroad) are considered eligible institutions. The institution is eligible if it participates in federal student aid programs. It’s best to contact your school directly to just double check that they qualify, but you can also refer to this list of eligible schools from the U.S. Department of Education.

Yes. The earnings portion of funds withdrawn for non-qualified purposes are typically subject to federal income tax, as well as an additional 10% federal penalty tax. Taxable withdrawals, on the other hand, are subject to applicable federal income tax on earnings, if any, but are not subject to the 10% additional federal penalty tax on earnings.

A non-qualified withdrawal is any withdrawal that is not considered a qualified expense, a taxable withdrawal, or a rollover. Save for these exceptions, the earnings portion (not the amount you contributed) of a non-qualified withdrawal typically is subject to federal income tax and an additional 10% federal penalty tax.

There are certain circumstances, such as if your beneficiary receives a full ride scholarship, when you can make a taxable withdrawal. A taxable withdrawal is a withdrawal made due to either the permanent disability or death of a beneficiary, the beneficiary’s receipt of a scholarship, or the beneficiary’s attendance at a military academy. Taxable withdrawals are subject to applicable federal income tax on earnings, if any, but are not subject to the 10% additional federal penalty tax on earnings.

You can make contributions at any time while your account is active, but, in order to reap any tax benefits on certain contributions, they should be made by the time you file your taxes or Tax Day (whichever comes first).