Can You Use a 529 Plan for a Certificate?

It can. A federal law signed in July 2025 added a new category of 529 expenses for programs that lead to a recognized credential. But not every certificate qualifies. The program has to pass a specific test, and the expense has to be one the law lists.

What changed in 2025

Public Law 119-21, the One Big Beautiful Bill Act, was approved on July 4, 2025. Section 70414 of that law adds “qualified postsecondary credentialing expenses” to the expenses a 529 plan can pay tax-free.

The new rule applies “to distributions made after the date of the enactment of this Act.” In other words, to 529 withdrawals made after July 4, 2025.

The same law also created Workforce Pell Grants for short job training programs.

Two ways a course can qualify

There are now two separate paths.

1. The school is an eligible educational institution. This was already the rule before 2025. IRS Publication 970 (for 2025 returns) says this is generally an accredited college, university, vocational school or other postsecondary school that is “eligible to participate in a student aid program administered by the U.S. Department of Education.” The IRS adds: “The educational institution should be able to tell you if it’s an eligible educational institution.”

2. The program is a recognized postsecondary credential program. This is the new path. The law defines it by the program and the credential, not by the school.

The test for a credential program

The law sets two conditions. Both have to be true.

First, the credential must be a recognized postsecondary credential. Under the law’s text, that means one of these:

• an industry-recognized employment credential from a program accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies or the American National Standards Institute;
• a credential in the Credentialing Opportunities On-Line (COOL) directory kept by the Department of Defense or a branch of the Armed Forces;
• a credential the Treasury Department identifies as industry recognized, after consulting the Secretary of Labor;
• a certificate of completion of a registered apprenticeship;
• an occupational or professional license issued or recognized by a state or the federal government, and any certification needed to get that license;
• a recognized postsecondary credential as defined in the Workforce Innovation and Opportunity Act (WIOA), through a program on a state WIOA list.

Second, the program must pass one of four tests.

Test	What it means
State WIOA list	The program is on a state list prepared under section 122(d) of WIOA.
VA directory	The program is listed in the public directory of the Veterans Benefits Administration’s Web Enabled Approval Management System (WEAMS).
Exam-based credential	An exam is required to get or keep the credential. The organization behind the exam is “widely recognized as providing reputable credentials in the occupation” and recognizes the program as preparing people for that exam.
Treasury list	The Treasury Department identifies the program as reputable, after consulting the Secretary of Labor.

Source: Pub. L. 119-21, Sec. 70414. IRS Publication 970 repeats these tests in its chapter on qualified tuition programs.

A course that gives you a certificate of completion, but meets none of these tests, does not count under the new rule.

What 529 money can pay for

For a program that passes the test, the law lists:

• tuition, fees, books, supplies and equipment “required for the enrollment or attendance” of the beneficiary;
• other expenses that would count if the program were at an eligible school;
• “fees for testing if such testing is required to obtain or maintain a recognized postsecondary credential”;
• “fees for continuing education if such education is required to maintain a recognized postsecondary credential.”

That last point helps if you already hold a credential that requires continuing education.

What doesn’t count

• Programs that fail the test. A certificate from a provider that isn’t an eligible school and doesn’t meet one of the four tests is not covered by this rule.
• Optional costs. The law covers items “required” for enrollment or attendance, testing “required” to get or keep the credential, and continuing education “required” to maintain it.
• Withdrawals made on or before July 4, 2025. The new rule applies only to distributions after that date.
• Costs already paid another way. Pub 970 says you reduce your qualified expenses by tax-free help, such as employer-provided educational assistance and the tax-free part of Pell Grants. You also can’t use the same expenses for both a tax-free 529 withdrawal and the Lifetime Learning Credit.

What happens if you get it wrong

If you withdraw more than your qualified expenses, part of the earnings becomes taxable. Pub 970 says: “Generally, if you receive a taxable distribution, you must also pay a 10% additional tax on the amount included in income.” Some exceptions apply, and the publication lists them.

Check your state’s rules too

The rule above is federal. Your state may treat it differently. California’s ScholarShare 529 plan puts it this way: “State tax treatment of withdrawals from 529 plans, including the new expanded uses for K-12 expenses and qualified postsecondary credential program expenses, is determined by the state where you file state income tax.”

Before you withdraw, check your plan’s website or call the plan. If the amount is large, talk to a tax professional.

How to check a program

Ask the provider in writing:

• Are you an eligible educational institution for federal student aid purposes?
• If not, which test does this program meet: a state WIOA list, the VA’s WEAMS directory, or an exam-based credential?
• Which credential will I earn, and who issues it?
• Which costs are required: tuition, fees, books, exam fees?

Then ask your 529 plan how to request the withdrawal and what records to keep.

The short version

Question	Answer
Can a 529 pay for a certificate?	Yes, if the school is eligible or the program meets the new credential test
Since when?	Withdrawals made after July 4, 2025
What can it pay for?	Required tuition, fees, books, supplies and equipment; required testing fees; required continuing education fees
What doesn’t count?	Programs that fail the test, optional costs, costs already covered tax-free
State taxes?	Set by your state. Check your plan.

Also compare other ways to pay, such as employer tuition help, before you use your savings. Our guide on how to pay for a professional certificate covers the main options.