How the OBBBA Expands Education and Tax Planning Opportunities

By Steve Moro, Director of Larson Tax Partners, LLC

The One Big Beautiful Bill Act (OBBBA) introduced several significant changes to 529 plans. These are aimed at expanding their utility and accessibility for taxpayers.

Below is a detailed summary of the modifications:

• Expansion of Eligible Expenses: The OBBBA expanded the definition of qualified expenses for 529 plans to include costs associated with apprenticeship programs registered with the Department of Labor. This change allows taxpayers to use 529 funds for vocational training and certifications, broadening the scope beyond traditional college expenses.
• Student Loan Repayment: Under the OBBBA, taxpayers can now use 529 plan funds to pay off up to $10,000 in student loans for the account beneficiary. Additionally, the same $10,000 limit applies to loans for each of the beneficiary’s siblings. This provision provides relief for families burdened by student debt.
• Tax-Free Rollovers to Roth IRAs: Starting in 2025, unused 529 plan funds can be rolled over into a Roth IRA for the beneficiary. This is still subject to annual contribution limits and a lifetime cap of $35,000. This provision is designed to encourage long-term savings and investment for beneficiaries who may not use all their 529 funds for education.
• Increased Contribution Limits: The OBBBA raised the annual contribution limits for 529 plans. This thereby allows families to save more for education and related expenses. The new limits are indexed for inflation starting in 2026.

These changes reflect the OBBBA’s focus on providing greater flexibility and financial relief for families investing in education and career development. But if you have questions about how these new provisions might affect your financial future, or how to use them to your advantage, Larson Tax Partners is here to help.

Whether you’re looking to optimize your education savings, reduce your tax burden, or plan ahead for future financial milestones, our team can guide you every step of the way. Reach out today to start a conversation.

About Larson Tax Partners

Larson Tax Partners, LLC is the in-house, full-service tax firm of Larson Financial Holdings, dedicated to serving both individuals and businesses. Our mission goes beyond simple tax prep: we deliver year-round planning to help you minimize your tax liability, maximize deductions and credits, and align your tax strategy with your larger financial goals.

Whether you’re filing your return, planning ahead, or navigating complex IRS regulations, our experienced team is here to empower your financial journey.

Contact us with your tax questions today.

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