The One Big Beautiful Bill Act signed July 4, 2025 allows 529 funds to flow tax-free to FAA flight training at Part 61 and Part 141 schools. A 44-year-old Iowa father with three daughters funded each 529 with $40,000 in an S&P 500 index fund, reaching about $325,000 total. He can withdraw about $90,000 for one daughter’s commercial pilot training without triggering the 10% federal penalty and without taxing the earnings portion if the program qualifies. Section 70414 amends Internal Revenue Code Section 529 to add Qualified Postsecondary Credentialing Expenses covering tuition, fees, books, supplies, and testing fees for FAA-recognized pilot and mechanic certificates. Previously, standalone Part 61 flight school withdrawals were non-qualified, causing ordinary income tax on earnings plus the 10% penalty.
#529-plans #faa-flight-training #tax-free-withdrawals #qualified-postsecondary-credentialing-expenses #part-61-and-part-141
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]