Section 529 of the Internal Revenue Code

Section 529 of the Internal Revenue Code governs qualified tuition savings plans designed to help families save for higher education expenses. These plans allow individuals to contribute money to an account that grows tax-deferred and can be withdrawn tax-free when used for qualified education costs like tuition, fees, and supplies. There are two main types: prepaid tuition plans and college savings plans. Contributions are often subject to gift tax limits, but many states offer additional tax benefits. Overall, Section 529 plans provide a tax-advantaged way to save for future educational expenses, encouraging college savings.