Can I Start a 529 Plan for Myself?

Congress created the Section 529 Qualified Tuition Program to provide families an incentive to save in advance for college expenses. Contributions to Section 529 plans are tax-deferred, the growth is tax-deferred, and withdrawals to pay for qualified higher education expenses are tax-free. You can create a Section 529 plan with yourself as beneficiary, and it has all the advantages of a plan set up for someone else.

Qualified Higher Education Expenses

Tuition from accredited schools, fees, books, supplies and equipment are all qualified higher education expenses eligible for favorable tax treatment on withdrawals from Section 529 plans. You can also use 529 plans to pay for computers, Internet access, and other information technology necessary while you are enrolled in school. You can also use 529 plans to pay for room and board expenses. You must be enrolled at least half time and the amount cannot be more than actually charged by the school if you are in student housing.


There is no income limit to 529 contributions or beneficiaries. You can earn any amount of money and still be able to contribute to a Section 529 plan. Individual states, however, do impose limits on total contributions--typically limiting contributions to a few hundred thousand dollars.

State Plans

States sponsor and run 529 plans, not the federal government. Every state has its own distinct Section 529 plan, with individual advantages and disadvantages. Any U.S. resident can open an account with a 529 plan in any state. However, some states provide additional state tax incentives to contribute to that state's Section 529 program.

Withdrawal Rules and Beneficiary Changes

The owner of the account may change the beneficiary with no tax consequence. If your plans change and you do not complete school, or if you do not spend all the money in the plan, you may change the beneficiary to anyone else you choose with no tax liability. However, if you try to withdraw the money without associating the withdrawal with a qualified higher education expense, the distribution is taxable as income, and incurs an additional 10 percent excise tax penalty from the IRS. In addition, your state may claw back any state tax benefits it granted when you contributed to the 529 plan if you withdraw funds