Kansas 529 Plan: Tax Benefits, Qualified Expenses, and Rollovers

The Kansas 529 plan lets state residents deduct up to $3,000 per beneficiary each year from their Kansas adjusted gross income ($6,000 for married couples filing jointly), with investment earnings growing free of federal and Kansas income tax when withdrawals pay for qualified education expenses. Kansas sponsors its own program, now called Quest529, but the state’s deduction applies to contributions made to any state’s 529 plan.

What You Get for Contributing

The deduction is granted per beneficiary, not per taxpayer. Contribute to accounts for three children and each account qualifies for its own $3,000 or $6,000 deduction.¹

Kansas is a tax-parity state. That means the deduction is not tied to the Kansas-sponsored plan; contributions to any state’s 529 plan qualify for the same Kansas income tax break.¹ You can shop other states for lower fees or different fund lineups without losing anything on your Kansas return.

Inside the account, investment earnings accumulate without a current tax bill. Pull the money out for qualified education costs and the earnings come out free of both federal and Kansas income tax.² Your original contributions were already made with after-tax dollars, so they are never taxed again regardless of how the money is spent.

What Counts as a Qualified Expense

At any accredited postsecondary school that participates in federal student aid, qualified expenses include tuition, mandatory fees, books, supplies, and equipment required for enrollment.²

Room and board qualifies when the student is enrolled at least half-time. On-campus housing counts up to whatever the school actually charges. Off-campus housing is capped at the room and board figure in the school’s official cost of attendance; rent paid above that allowance with 529 money becomes a non-qualified withdrawal.

K–12 Tuition

Starting in 2026, you can withdraw up to $20,000 per beneficiary per year for tuition at an elementary or secondary school. That doubles the earlier $10,000 cap and took effect January 1, 2026.² The K–12 allowance covers tuition only. Books, supplies, and other primary- or secondary-school expenses do not qualify.

Student Loans and Apprenticeships

Up to $10,000 over a beneficiary’s lifetime can be withdrawn to pay down qualified student loans. The cap applies across every 529 account held for that person, so drawing from multiple plans does not expand it.³ Each sibling has their own $10,000 lifetime limit.

Fees, books, supplies, and equipment for a registered apprenticeship program certified by the U.S. Department of Labor also qualify.²

What Happens If You Use the Money for Something Else

Spend 529 funds on anything other than a qualified expense and the earnings portion of the withdrawal is taxed as ordinary federal income and hit with an additional 10% federal penalty. The contribution portion is never taxed or penalized because it went in with after-tax dollars. Kansas does not add a separate state penalty.

The 10% penalty is waived in a handful of situations even when the withdrawal is non-qualified. A beneficiary who receives a tax-free scholarship lets you withdraw up to the scholarship amount penalty-free, though income tax on the earnings still applies. The same waiver covers attendance at a U.S. military academy, disability, or death of the beneficiary.

Leftover Money and the Roth IRA Rollover

Federal law allows unused 529 funds to be rolled into a Roth IRA for the beneficiary, and Kansas follows the federal treatment, so these rollovers are not subject to Kansas income tax. The rules are tight:

The 529 account must have been open for at least 15 years.
The lifetime cap on rollovers from all 529 accounts for the same beneficiary is $35,000.
Each year’s rollover cannot exceed the annual Roth IRA contribution limit ($7,000 in 2025; check for 2026 adjustments).
The beneficiary must have earned income at least equal to the rollover amount in the year of the transfer.
Contributions made within the five years before a rollover, and their earnings, are not eligible.

Changing the beneficiary on a 529 may reset the 15-year clock, so think carefully before making a change specifically to unlock this rollover.

Contribution Ceilings and Gift Tax

Kansas sets no annual contribution cap, but it does limit total balances. Once the combined balance across all accounts for one beneficiary tops $455,000, no further contributions are accepted. That figure adjusts each year based on average higher education costs in Midwestern states.¹ Remember that the Kansas deduction is still capped at $3,000 or $6,000 per beneficiary per year no matter how much you put in.

Federally, 529 contributions count as gifts. In 2026, each person can contribute up to $19,000 per beneficiary without filing a gift tax return, and married couples can combine their exclusions for $38,000. A superfunding election lets one person front-load up to $95,000 (or $190,000 for a couple) at once and treat it as spread across five years for gift tax purposes. No further gifts to that beneficiary are allowed during the five years without dipping into your lifetime gift tax exemption.

Opening an Account

Kansas’s direct-sold plan is now Quest529, managed by TIAA-CREF Tuition Financing. In 2026, plan management transferred from American Century Investments, the Learning Quest Advisor program was folded into Quest529, and the Schwab 529 Plan was closed to new investors.⁴⁵ Existing Learning Quest and Learning Quest Advisor accounts transitioned automatically.

To open an account, you need a Social Security Number for both the account owner and the beneficiary, standard identification, and a bank account for funding. The application runs through Quest529.com. There is no minimum initial contribution for accounts set up with automatic recurring deposits.

Because of tax parity, compare Quest529’s expense ratios and portfolio options against other states’ plans before enrolling. The Kansas deduction is the same either way, so the decision comes down to fees, fund quality, and features like matching grants. Keeping the account in-state simplifies administration; going elsewhere costs nothing on your Kansas return if another plan fits better.

1
Kansas State Treasurer. Learning Quest Frequently Asked Questions
2
Internal Revenue Service. Topic No. 313, Qualified Tuition Programs (QTPs)
3
Office of the Law Revision Counsel. 26 U.S. Code 529 – Qualified Tuition Programs
4
Learning Quest. Learning Quest – Quest529 – Exciting Enhancements Coming
5
Schwab. Learning Quest 529 Plan