Qualified Tuition Plan (Section 529) in header of articles
Qualified Tuition Plan (Section 529) in content page of articles
A qualified tuition plan (QTP) is a personal savings account. You use it to pay for a student's qualified education expenses. The student must go to an eligible educational institution. Distributions from the account are tax-free if you use the money for qualified expenses, like room and board.
A state or an agency of the state usually establishes QTPs, and most states now offer them. Also, most plans are open to residents of any state. A private educational institution can also establish a QTP. However, you can only use the money to prepay qualified education expenses. To be an eligible educational institution, both of these must usually apply:
The institution is a:
Other postsecondary educational institution
The institution must be eligible to participate in a student-aid program administered by the Department of Education.
Contact your state government or the educational institution you're interested in to find out if they participate in a QTP.
To learn more, see:
IRS Publication 525: Taxable and Nontaxable Income