Withdrawals from a 529 plan are fully tax-free when used to pay for qualified education expenses. Those generally include anything a student needs to attend an accredited college, university or vocational or technical school � tuition, room and board,3 books and equipment, and computer expenses, for example. Other qualified expenses: expenses for participation in a certified and registered apprenticeship program; withdrawals of up to $10,000 per year to pay for tuition at an eligible private, religious or public K-12 school; and payments toward student loans of the beneficiary and siblings of the beneficiary, up to a lifetime maximum of $10,000 (lifetime maximum applies separately to the account beneficiary and each sibling of the beneficiary). While the rules cover a wide range of education costs, some expenses aren't considered qualified. Those include the cost of traveling to and from school, college test prep or entrance exam fees, health insurance purchased through the school, and fees for extracurricular activities. The earnings portion of non-qualified withdrawals is subject to federal and possibly state and/or local income taxes, as well as a potential 10% additional federal tax.