A 529 plan is a tax-advantaged savings plan intended to fund education expenses. Contributions to these plans are tax-deferred, and when used for qualified education costs, they are tax-free at the federal level. Some states also offer tax-exempt benefits. Originally designed for post-secondary education, 529 plans were expanded to cover K-12 education in 2017 and later extended to apprenticeship programs in 2019. There are two major types of 529 plans: savings and prepaid tuition.
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