529 accounts aren’t just for graduating high school seniors; they are a great resource for adult learners, too! And Ohio’s 529 Plan, CollegeAdvantage, can help you save for whatever education or career training you want to pursue.
For certain professions, you will have to continue your education after graduation. In some circumstances, you may need to further your education to increase your opportunity for growth in your current career. Maybe you’re thinking of changing professions and want to refresh your education before your job search. Or maybe you’re at a point in your life when you can complete your higher education.
Ohio’s 529 Plan works for whatever next steps you want to take in your life. 529s can be used tax-free at a four-year college or university, two-year community college, trade or vocational school, apprenticeship approved by the U.S. Labor Department, or certificate programs nationwide that accepts federal financial aid. In order to see you can use your 529 account at a higher education institution, then check to see if it has a Federal School Code with the federal agency that runs the Free Application for Federal Student Aid (FAFSA) program. If the school does, then you can use your Ohio 529 account there.
Open your own Ohio 529 account
If you’ve opened an Ohio 529 higher education savings account for your child, then you already know how to start on for your own continuing education and career training. This time, when you open an Ohio 529 account for your own higher education expenses, you will be the account owner as well as the beneficiary. For a reminder, here’s our guidance on how to open an Ohio 529 account.
If there are any leftover funds in your child’s 529 account after they start their career, you can roll over those funds to your own Ohio 529 account, as you are a member of the family. Additionally, this 529 rollover will be tax free.
There are no fees to open an Ohio 529 account and you can open one of these higher education savings accounts for as little as $25. And your own Ohio 529 plan will enjoy the same tax benefits of tax-free earning, tax-free withdrawals, and State of Ohio income tax deductions for contributions made to your Ohio 529 account.
What qualified expenses can be paid with Ohio 529?
Whether you will head to an in-person classroom or are sitting at your laptop for online learning, you can use your Ohio 529 account to pay for that class. 529 college savings plans cover those qualified expenses necessary to attend a higher education institution. And tuition—whether for in-person or online classes—is a necessary cost for attendance.
What else can you pay tax-free with a withdrawal from your own 529 account, other than tuition? Mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and class schedule; and qualified costs for apprenticeships such as fees, textbooks, supplies, and equipment like required trade tools.
If you need just a few more classes to finish your undergraduate degree, contact the school you attended to see what steps you need to take to complete your degree at this institution. Or if you want to transfer your previously earned college credits to another institution and you live in Ohio, the Ohio Department of Higher Education (ODHE) can help you see how to transfer your credits and which classes will transfer. Start your search with the Transfer Credit Ohio for guidance on your next steps to finish your higher education. You can still use your Ohio 529 account to take those final courses to earn your bachelor’s degree at a federally accredited higher education institution.
If you want to pursue a graduate-level degree, your Ohio 529 account can pay for those qualified higher education expenses nationwide. Whether it’s a master’s degree, doctoral degree, doctor of medicine degree (M.D.), juris doctor degree (J.D.), doctor of dental surgery degree (D.D.S.), or any other type of graduate school, make sure it has a Federal School Code to use your tax-free 529 withdrawal there.
How to use your Ohio 529 plan
In order to pay for your classes as an adult learner, you will need to take a tax-free withdrawal from your Ohio 529. You can either initiate the withdrawal online by logging into your account, which will be the faster way to pay, or mail in a Withdrawal Request Form. You can opt to have the withdrawal electronically sent to your higher education institution, to your bank account, or mailed to the school. If you choose to send the withdrawal to the school, please make sure you have your correct student ID numbers and correct school address ready to share with Ohio’s 529 Plan.
Most businesses and organizations will reimburse you for the continuing education course after its completion. Some organizations will also repay you based on the grade you earned. By saving in Ohio 529 first, you can take advantage of the advantages of tax-free earnings, tax-free withdrawals, and state income tax deduction. After you are reimbursed, you can place those repayment funds into your 529 account and start the process over again.
If you want to deposit additional funds to your Ohio’s 529 Plan to pay any upcoming qualified expenses for your own education, these new contributions must be in your account at least seven business days before those funds can be distributed and the withdrawal processed. This and other information is covered in the Withdrawals section on page 8 of the CollegeAdvantage Direct 529 Savings Plan Offering Statement and Participation Agreement.
529-to-Roth IRA rollover
If you save more in your Ohio 529 account than you need for your continuing education, you have options. You can transfer tax free the remaining 529 funds to another member of the family – anyone related by blood, marriage, or adoption.
As of January 1, 2024, you can roll over remaining 529 funds to a Roth IRA for the same beneficiary of your 529 account, yourself. There are requirements to use this newest 529 benefit, including that the 529 account must be maintained for a 15-year period ending on the date of the 529-to-Roth IRA rollover.
Since 1989, Ohio’s 529 Plan has been helping families across the nation save for their children’s higher education. Ohio’s 529 Plan covers qualified expenses at any four-year college or university, two-year community college, trade or vocational school, apprenticeship approved by the U.S. Labor Department, or certificate programs, or continuing education classes nationwide that accepts federal financial aid. Learn, plan, and start for as little as $25 today at CollegeAdvantage.
This blog was originally published in February 2023 and has been updated with new information in March 2024.
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