College happens sooner than you think

Anyone with a valid Social Security Number or Taxpayer Identification Number who is at least 18 years of age can open a Bright Start 529 account. Accounts can be opened online.

If your child ends up not needing the funds for college, you always have multiple options for your money:

• Your funds can be used to pay for a variety of eligible education expenses, including public or private colleges, universities, community colleges, professional and vocational schools, certain apprenticeship expenses or postgraduate programs in the United States—and even some schools abroad.¹
• Your 529 can be used for student loan repayment up to a $10,000 lifetime limit per individual.¹
• Effective July 5, 2025, you can use funds for postsecondary credentialing expenses¹
• You can use up to $20,000 annually toward K-12 expenses (per student).¹
• You can transfer the funds to another eligible beneficiary, such as another child, a grandchild or yourself.
• If you just want the money back, you can withdraw the funds at any time. If funds are withdrawn for a purpose other than qualified higher education expenses, the earnings portion of the withdrawal is subject to federal and state taxes plus a 10% additional federal tax on earnings (known as the “Additional Tax”). See the Plan Description for more information and exceptions.
• You can rollover funds to a Roth IRA. Limitations apply.²
• Or you can always wait because the funds never expire, and often the choice to go to school is a delayed decision. So if your child changes their mind down the road, your savings will still be available.

Footnotes

1. ¹Withdrawals for Postsecondary Credentialing Expenses and K-12 Expenses can be withdrawn free from federal tax. For Illinois taxpayers, these withdrawals may include recapture of tax deduction, state income taxes well as penalties. Withdrawals for registered apprenticeship programs and student loans can be withdrawn free from federal and Illinois income tax. If you are not an Illinois taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.↩
2. ²For Illinois tax purposes, rollovers are permitted from an account to a Roth IRA without incurring federal and state income tax or penalties. State tax treatment of a rollover from a 529 plan into a Roth IRA is determined by the state where you file state income tax. There are conditionsconditionsconditions that must be met, including the 529 plan must have been in existence for at least 15 years.
   
   You should talk to a qualified professional about how tax provisions affect your circumstances.↩

Federal qualified higher education expenses include:

• tuition, fees, books, supplies, and equipment required for enrollment or attendance of a Beneficiary at an eligible educational institution;
• expenses for housing and food (room and board) incurred by students who are enrolled at least half-time and subject to certain limitations;
• expenses for the purchase of computer or certain peripheral equipment, computer software, or Internet access and related services if it is to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution;
• expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance;
• tuition, fees, books, supplies, and equipment required for participation of the beneficiary in an apprenticeship program;
• payments on qualified education loans of the beneficiary or a sibling of the beneficiary, subject to a lifetime limit of $10,000 per individual;
• (for federal but not Illinois tax purposes) K-12 expenses subject to an annual per beneficiary limit for all Section 529 Plans of $10,000 per taxable year for taxable years prior to December 31, 2025, and $20,000 per taxable year for taxable years beginning after December 31, 2025; Tuition;
  • curriculum and curricular materials;
  • books or other instructional materials;
  • online educational materials;
  • tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and (i) is licensed as a teacher in any state; (ii) has taught at an eligible educational institution, or (iii) is a subject matter expert in the relevant subject;
  • fees for nationally standardized norm-referenced achievement tests, advanced placement exams or any exams related to college or university admission;
  • fees for dual enrollment in an institution of higher education; and
  • educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies. and
• (for federal but not Illinois tax purposes) postsecondary credentialing expenses.
  • tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a beneficiary in a recognized postsecondary credential program, or any other expense incurred in connection with enrollment in or attendance at a Recognized postsecondary credential program if the expense would, if incurred in connection with enrollment or attendance at an eligible educational institution, be treated as qualified higher education expenses;
  • fees for testing if required to obtain or maintain a recognized postsecondary credential; and
  • fees for continuing education if required to maintain a recognized postsecondary credential.

In the event of a refund of amounts paid for qualified higher education expenses from an eligible educational institution, the refund may not be redeposited to the 529 plan within 60 days without the amount being subject to tax. The recontribution amount cannot exceed the amount of the refund.

State tax treatment of withdrawals is determined by the state where you file state income tax.

Review the plan description for additional details on eligible expenses and withdrawals.

You may request a withdrawal via your account online. Select the beneficiary you would like to withdraw the money for, click “Make a Withdrawal” on the lefthand navigation and follow the directions. You may also request a withdrawal using the Withdrawal Request Form.