- The information on this page is current as of June 4, 2026.
How does a 530A account work?
Can I take money out before my child is 18?
No. In most cases, you cannot take money out of a 530A account before your child turns 18, even during emergencies or for education expenses. Any money deposited in the 530A account has to stay there until your child turns 18.
There are a few exceptions:
- If your child dies before turning 18, there are ways to recover the money.
- If your child has a disability, the funds in their 530A account money can be transferred to an ABLE account when they are 17.
What can the money be used for once my child is 18?
Once your child turns 18, they may be able to use the money for certain things, including:
- Higher education.
- Buying a first home, up to $10,000. (For example, if your child has $25,000 in their account, they can only use the first $10,000 toward a home purchase).
- Some personal or family emergencies, up to $1,000 per year and with proper documentation.
- Some large medical expenses, but only for costs above 7.5% of your child’s income. (For example, if your child earns $50,000, and they have $10,000 in medical expenses, they can take out $6,250 to partially cover these costs. If their medical expenses were only $3,000, they could not take out any money to cover them).
- Birth or adoption expenses, up to $5,000 per child.
They may also be able to use the money in certain situations, including disability, domestic violence, unemployment, military deployment, or natural disasters.
If your child wants to use the money for anything else, like starting a business or personal expenses, they would pay a 10% penalty. These exceptions are subject to change.
After age 59½, they can withdraw the money for any reason without penalty.
530A accounts follow some of the same rules as retirement savings accounts called IRAs. In general, the money is meant to stay in the account for a long time. See the full IRA withdrawal rules.
Can my child use the money to start a business when they turn 18?
Starting a business is not currently one of the approved ways to use money from a 530A account.
Your child could still use the money to start a business, but they would have to pay a 10% penalty.
Some websites and news stories have incorrectly said that 530A money can be used to start a business without a penalty. That is not true. Those reports were based on an earlier version of the law that did not pass.
What does taking the money out look like? Who decides what the money gets used for?
The money in the 530A belongs to your child. Once they turn 18, they can decide how to use it.
Your child may have to pay taxes when they take money out of the account, no matter how the money is used. The company managing the account should provide tax forms clarifying how much of the withdrawal is taxable.
Where is the money invested?
530A funds are invested in stocks and bonds that track the overall movement of the stock market. In most cases, that means that if the S&P 500 goes up 10%, the 530A will also go up 10%. Technically speaking, your child’s 530A account will own shares in a “mutual fund” or an “exchange-traded fund.”
Haven't filed your taxes? You might be leaving money on the table
You may want to file a tax return even if you did not work or earned very little income. Filing taxes may help your family access benefits, tax credits, and a 530A account.