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When it comes to saving for college, 529 plans have been the popular go-to option for many families over the past 20-plus years.

Many of the state-sponsored plans also feature a lesser-used savings choice: Tapping the accounts up to $10,000 a year to pay tuition for kindergarten through high school without federal taxes or penalties. This option covers public, private and religious schools.

Even with this additional benefit, don’t rush into this move to pay K-12 tuition without checking your state’s plan. More importantly, experts say that raiding your 529 college savings plan to pay for early education tuition may not be the best financial move.

While the law that allows families to withdraw 529 funds for K-12 was enacted more than two years ago, not all states have tweaked their laws to conform with federal guidelines.

The 529 plans were created to help families saving for college keep up with rising tuition. Money invested in these plans grows tax-deferred and can be withdrawn tax-free for a wide range of college expenses, including computers and software.

Many states also offer a tax deduction to residents who contribute to their home-state plan.

But until two years ago, if you used the money for anything other than higher education, the earnings on the withdrawals were subject to income taxes and a 10% penalty.

As of this year, residents in about 22 states, plus the District of Columbia, are eligible to use the 529 funds for kindergarten through high school tuition with tax credits or deductions. In addition, some states do not offer tax deductions or credits for K-12 tuition, but distributions are state tax-free, according to data compiled by

Even if your state permits tax-free K-12 withdrawals, it might not be the wisest move, said Mark Kantrowitz, publisher and vice president of research at

A key advantage of a 529 plan is that you can aggressively invest in stocks over a longer time period. But if the money is used to cover elementary school tuition, for example, the “time horizon is shorter, so there is less time for the earnings to compound,” Kantrowitz said.

Dipping into the 529 early could leave you with a shortfall when heftier college bills come due. Ideally, you can avoid this college cash crunch by transferring money from your retirement savings when and if you dip into your 529.

Kantrowitz said it may make sense to use the 529 funds to save for private school if you expect your child to enroll in private school, but only for high school.

If you can afford to contribute to a 529 for college while also paying primary or secondary education tuition bills, using the account for early education could be a smart tax move if your state offers tax breaks, he said.

Another possibility: Set up a separate 529 plan for K-12. “This will allow you to use a different asset allocation of the K-12 savings versus the college savings” account, Kantrowitz said.

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