Using 529 Funds for Dyslexia Tutoring: What Families Need to Know
- Hammond Bell Educational Services, LLC
- Jan 6
- 4 min read
Updated: Jan 7
For many families, the cost of specialized tutoring -- especially an evidence-based reading intervention like Orton-Gillingham -- can feel overwhelming. The good news is that the rules for 529 education savings plans were relaxed in 2025 and now allow these plans to be used for certain educational therapies for students with disabilities.
If your child needs structured literacy or Orton-Gillingham–based intervention, the Barton Reading and Spell System, the Institute for Excellence in Writing (IEW), or Math U See, the new 529 rules can help reduce your expenses and provide tax savings while getting your child this critical help.
What Is a 529 Plan?
A 529 plan is a tax-advantaged education savings account designed to help families pay for education expenses. Until 2025, these plans were associated with college costs. Fortunately, they can now be used to cover the cost of certain educational therapies for students with disabilities.
529 to Pay for Tutoring?
Funds in a 529 plan can be used for tutoring that is considered a qualified educational expense. This means that the tutoring must be for students enrolled in K-12 and must be provided by an eligible educational institution that is eligible for certain federal funding. This is somewhat narrow and probably doesn’t allow the use of 529 funds to be used for online private tutoring.
The new 529 rules for special education tutoring are broader. They allow 529 funds to be used for certain educational therapies for students with disabilities. To be eligible, the student must have a documented disability. Additionally, the services must be provided by a licensed or accredited professional. By way of example, the new law says that occupational, behavioral, physical, and speech-language therapy are covered. But these are only examples and not a complete list. Therefore, we believe that families should be able to use 529 funds for Barton / Orton-Gillingham structured literacy tutoring in some circumstances.
While 529 rules can vary by state and individual plan, we feel that 529 funds can be used to cover specialized tutoring when:
the child has a documented disability (such as an IEP or a 504 Plan), and
the tutoring is provided by a certified Barton tutor.
We say this because dyslexia (among others) is a recognized disability, and structured literacy is a recognized therapeutic approach. Additionally, Barton/Orton-Gillingham is formal, standardized, and evidence-based.
That being said, the Internal Revenue Service has yet to express its view on this, and we are not qualified to offer legal or tax advice. Therefore, you should talk to your legal and/or tax adviser and your plan administrator before using your child’s 529 funds for our services. This is especially true because 529 plans are regulated at both the federal and state level.
Why This Matters for Orton-Gillingham Tutoring
Orton-Gillingham (“OG”) tutoring is not just “extra help.” It is a research-based, structured literacy intervention designed specifically for students with dyslexia and related reading difficulties. OG instruction is:
Explicit and systematic
Multisensory
Diagnostic and individualized
Cumulative and mastery-based
Because of the intensity and specialization required, high-quality Orton-Gillingham tutoring is an investment—and it’s often an essential one that is not implemented in schools.
The ability to use 529 funds could help make this level of support more affordable and sustainable, especially for families who already have education savings in place.
Rather than choosing between long-term progress and financial strain, families might be able to redirect funds they’ve already saved toward the intervention their child needs right now.
A Helpful Reminder
Every 529 plan is different. We always encourage families to:
Contact their plan administrator directly
Ask specifically about specialized tutoring or educational therapy
Keep documentation related to tutoring services
Confirm with your tax or legal advisor before committing funds
While we can't provide tax or financial advice, we are happy to provide families with invoices, descriptions of services, and documentation that may be helpful when speaking with their provider.
Making Evidence-Based Intervention More Accessible
Early, consistent intervention can change the trajectory for a child with reading, spelling, or math difficulties. If using 529 funds helps remove a financial barrier and allows a child to receive Orton-Gillingham tutoring sooner—or more consistently—that’s a win!
Using ABLE Account Funds- An Alternative
Alternatively, you may wish to investigate rolling your child’s 529 funds into an “ABLE” (“Achieving a Better Life Experience”) Account, another federally tax advantaged account. ABLE accounts are meant to help individuals with disabilities pay for a wide range of everyday and support expenses without losing eligibility for important benefits like Supplemental Security Income (SSI) or Medicaid. ABLE accounts can be used for qualified disability expenses, which are broader than traditional education expenses. They include special education services, tutoring and educational therapies, assistive technology and educational support outside a traditional school setting.
Conclusion
Always check with your legal and/or tax advisor before committing 529 funds, and be sure to ask about state tax implications of possible options.
If you have questions or want help thinking through your options, you are not alone. Many families are navigating this for the first time, and we are happy to share what we have learned along the way.
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