Using 529 Plans While Living Abroad: What Actually Qualifies?

Using 529 Plans While Living Abroad: What Actually Qualifies?

If you're a U.S. citizen living overseas with a 529 college savings plan, you may be surprised by what expenses are considered qualified, and where the lines are still unclear.

Here is a quick breakdown:

K–12 Tuition Abroad:

Qualified since 2018, up to $10,000 per student per year (rising to $20,000 in 2026).

This includes private, public, or religious schools outside the U.S., such as Chadarim, Bais Yaakovs and yeshivos in Israel or international day schools, as long as the school has a formal curriculum and enrollment.

Postsecondary Abroad:

Only qualified if the institution is on the U.S. Department of Education's Title IV list.

Hebrew University and Bar-Ilan qualify. Most seminaries, yeshivos, and private colleges abroad do not.

K–12 Books, Tutoring, and Curriculum:

Starting in 2025, these will also qualify, but only if the student is enrolled in a real school and the tutor meets minimum professional standards.

Educational Therapies:

Also beginning in 2025, 529 funds may be used for therapies for students with disabilities, including speech, occupational, behavioral, and physical therapies, if provided by a licensed or accredited practitioner. There is no disqualification for those living abroad.

Homeschooling Abroad:

Generally not qualified. However, if your child is formally enrolled in a U.S.-based umbrella school that provides oversight and academic records, there is a reasonable argument that the expenses may qualify, although there is no formal IRS guidance yet.

However, keep in mind:

While the plain reading of the law supports the inclusion of foreign K–12 institutions, the lack of explicit IRS guidance creates some audit risk. Taxpayers relying on this interpretation should maintain clear records of enrollment, tuition payments, and educational purpose.

One More Caveat:

Even when an expense is allowed under the law, some 529 plan providers may block or delay withdrawals for foreign schools due to system limitations. Manual paperwork or reimbursement methods may be necessary.

If you're using a 529 plan while living outside the U.S., the rules are more nuanced than many people realize. Plain reading of the law supports broader use than is commonly assumed, especially at the K–12 level.