Latest / The College Savings Podcast with Fexingo: 529 Plans, Education Funding, and Student Costs
The Silent Tax Trap in Your 529 Plan
Most families assume their state tax deduction for a 529 plan is free money. But as of September 28, 2026, the definition of what counts as a qualified expense has shifted subtly due to recent IRS guidance on administrative fees and non-educational costs. Lucas and Luna break down how a specific loophole in state residency rules can turn a tax benefit into a double-taxation nightmare if you move states or change schools. We look at the real numbers from a mid-sized public university to show exactly where that hidden cost lives.
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The skinny
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