At Bridges Middle School, we know that finding the right educational environment for a neurodivergent child can be life-changing. We also understand that specialized education represents a significant financial commitment for families.
Parents sometimes ask whether they can use college savings, disability savings, or available tax provisions to help pay Bridges tuition. Depending on a family’s circumstances, three options may be worth discussing with a qualified tax professional:
- Paying eligible K–12 expenses directly from a 529 account.
- Rolling 529 funds into an eligible child’s ABLE account and using those funds for qualified disability expenses.
- Claiming qualifying special-education tuition as an itemized medical expense.
Each option has different eligibility requirements, limits, documentation standards, and federal and Oregon tax implications.
Important disclaimer: This article is provided for general educational purposes only. It is not financial, tax, accounting, or legal advice. Tax treatment depends on each family’s individual circumstances, including the student’s diagnosis and functional needs, account ownership, state of residence, prior contributions, prior Oregon tax benefits, and the timing and use of withdrawals. Federal and state rules may also change. Before transferring, withdrawing, or spending funds—or claiming a deduction—Bridges strongly recommends consulting a qualified tax attorney and/or licensed tax professional familiar with 529 plans, ABLE accounts, and special-education medical deductions.
First, Know the 2026 529 Limit
Beginning in 2026, families may use up to $20,000 per student, per calendar year, from all of that student’s 529 accounts combined for eligible elementary or secondary school expenses.
The federal list of eligible K–12 expenses now includes:
- Tuition;
- Curriculum and curricular materials;
- Books and instructional materials;
- Certain tutoring and outside educational classes;
- Standardized testing and college-admission testing fees;
- Dual-enrollment fees; and
- Certain educational therapies for students with disabilities when provided by a licensed or accredited practitioner or provider.
The $20,000 limit applies across all 529 accounts naming the student as beneficiary. It is a calendar-year limit, not a school-year limit. (IRS)
Does a learning-disability diagnosis increase the 529 limit?
No. A diagnosis of dyslexia, ADHD, autism, a language disorder, or another academic or developmental disability does not increase the direct K–12 529 limit.
The maximum remains $20,000 per student for 2026, regardless of diagnosis or the total cost of tuition. The diagnosis may, however, be relevant to ABLE eligibility or a potential special-education medical deduction.
Federal and Oregon treatment may be different
Under federal law, a qualifying 529 distribution of up to $20,000 may be excluded from federal taxable income when used for eligible K–12 expenses.
Oregon does not necessarily provide the same state tax treatment. Current Oregon guidance indicates that K–12 withdrawals may require families to add certain amounts back to Oregon taxable income and may trigger recapture of an earlier Oregon tax benefit. Oregon’s state-sponsored Embark plan similarly cautions that federal and Oregon treatment differ for K–12 distributions. (Oregon)
For this reason, Oregon families should not initiate a direct 529 withdrawal based only on the federal rule. A tax professional should review the potential Oregon consequences first.
Option One: Paying Bridges Directly From a 529 Account
For families choosing the direct 529 option, the general process is:
Step 1: Confirm the available annual amount
Review all 529 accounts naming the student as beneficiary. Add together any K–12 distributions already taken during the calendar year and subtract that amount from the $20,000 federal limit.
For example, when $5,000 has already been withdrawn for qualified tutoring and educational therapy during 2026, no more than $15,000 remains available for other qualified K–12 expenses during 2026.
Step 2: Request a tuition statement from Bridges
Ask the Bridges office for:
- The student’s current tuition statement;
- The amount due during the applicable calendar year;
- The payment schedule;
- The student’s FACTS or tuition-account information; and
- A receipt after payment is completed.
Because the Bridges academic year crosses two calendar years, families should distinguish between tuition actually paid in 2026 and tuition paid in 2027.
Step 3: Contact the 529 administrator
Ask whether the plan can send payment directly to Bridges or whether the account owner must receive the distribution and then pay the school.
Families should coordinate the distribution and tuition payment within the same tax year and maintain documentation showing that the distribution did not exceed the student’s eligible expenses for that year.
Step 4: Save all records
Retain the tuition statement, proof of payment, 529 distribution confirmation, account statements, and Form 1099-Q. A tax professional may need these records to determine the federal exclusion and any Oregon addition or credit recapture.
Option Two: Rolling 529 Funds Into an ABLE Account
For an eligible student with a disability, a 529-to-ABLE rollover may provide another way to use existing savings for disability-related education expenses.
An ABLE account is a tax-advantaged account owned by an eligible person with a disability. Account earnings and distributions are generally tax-free when the money is used for qualified disability expenses, including qualifying education expenses. (IRS)
ABLE eligibility is not based on diagnosis alone
Beginning January 1, 2026, a person may be eligible for an ABLE account when the onset of the qualifying disability or blindness occurred before age 46.
The individual generally must either qualify for disability-related benefits through Social Security or meet the ABLE program’s disability-certification requirements. Those requirements generally involve a medically determinable physical or mental impairment resulting in marked and severe functional limitations that has lasted, or is expected to last, at least 12 months.
A learning-disability, ADHD, or autism diagnosis may be part of that determination, but the diagnosis itself does not automatically establish ABLE eligibility. The nature, severity, duration, and functional impact of the condition matter. (Oregon.gov Apps)
Understanding the 2026 ABLE Rollover Limit
The standard Oregon ABLE contribution limit for 2026 is $20,000.
A 529-to-ABLE rollover counts toward that limit. It is not an additional $20,000 contribution category.
The maximum rollover is calculated as:
$20,000 minus all other standard contributions already made to the ABLE account during 2026.
For example:
- Standard 2026 ABLE limit: $20,000
- Family contributions already made: $4,000
- Maximum remaining 529-to-ABLE rollover: $16,000
Oregon ABLE confirms that a qualifying 529 rollover can be completed without penalty, but the rollover is limited to $20,000 minus other contributions already made during the calendar year. (oregonablesavings.com)
The rollover limit is not the same as an ABLE withdrawal limit
The $20,000 figure limits how much may generally be contributed or rolled into the ABLE account during 2026. It is not a separate annual ceiling on qualified ABLE withdrawals.
ABLE distributions are evaluated based on the beneficiary’s qualified disability expenses. When annual distributions do not exceed qualified disability expenses, the distributions are generally not taxable. Education is an identified qualified-disability-expense category, provided the expense relates to the person’s disability and helps maintain or improve health, independence, or quality of life. (IRS)
Step-by-Step: Using a 529-to-ABLE Rollover
Step 1: Confirm the student’s ABLE eligibility
Review eligibility with Oregon ABLE and the student’s licensed physician or other qualified professional. Keep the medical and disability documentation required by the plan.
A parent or other authorized representative may generally establish and manage an account for a minor, but the student remains the ABLE account’s beneficiary and owner.
Step 2: Open or confirm the ABLE account
The account should be established in the eligible student’s name. Confirm that the information on the ABLE account is consistent with the beneficiary information on the 529 account.
Step 3: Calculate the remaining contribution capacity
Before requesting a rollover, total every contribution already made to the ABLE account during the calendar year, including family gifts and prior 529 rollovers.
Do not request the full $20,000 when other standard contributions have already been made.
Step 4: Use the official rollover process
Contact both plan administrators and request the appropriate 529-to-ABLE rollover form. A direct plan-to-plan transfer is generally preferable when available because it creates a clearer documentation trail.
Confirm the beneficiary, account numbers, transfer amount, processing time, and any plan fees before submitting the request.
Step 5: Pay the qualified tuition expense
After the rollover has been credited to the ABLE account, use the account’s available payment or withdrawal process to pay Bridges tuition.
The family should be prepared to document why the educational expense relates to the student’s disability and supports the student’s health, independence, or quality of life. ABLE eligibility does not automatically mean that every expense paid from the account will qualify.
Step 6: Retain complete records
Keep:
- Disability-certification and diagnosis documentation;
- The completed rollover request;
- Statements from both the 529 and ABLE plans;
- The Bridges enrollment agreement;
- Tuition invoices and receipts;
- Proof of the ABLE distribution;
- Form 1099-Q;
- Form 1099-QA; and
- Form 5498-QA.
A nonqualified ABLE distribution may cause the earnings portion to become taxable and may result in an additional federal tax. (IRS)
Could Bridges Tuition Qualify as a Medical Expense?
Separate from the 529 and ABLE rules, some families may be able to include qualifying special-education tuition as a federal medical expense under Section 213 of the Internal Revenue Code.
IRS Publication 502 states that the cost of attending a school that furnishes special education to help a child overcome learning disabilities may be included in medical expenses when:
- Overcoming or managing the learning disability is the primary reason for attending the school; and
- Any ordinary education received is incidental to the special education being provided.
Publication 502 also recognizes certain tutoring expenses when the tutoring is recommended by a doctor and provided by a teacher specially trained to work with students with learning disabilities. (IRS)
A diagnosis alone does not make tuition deductible
The IRS analysis is individualized. It considers the child’s condition, the nature of the school’s services, and the principal reason the child attends.
Bridges is specifically designed for neurodiverse middle school students and provides small classes, individualized instruction, social-emotional development, self-advocacy instruction, and specialized support. These program features may be relevant to a family’s analysis, but Bridges cannot determine whether an individual family’s tuition qualifies as a medical expense.
Bridges has prepared an additional overview summarizing Section 213, the related Treasury regulations, IRS Publication 502, and the special-school framework. The document also advises families to consult their attorney or tax professional because eligibility varies by family and tax year: Deducting Special Education Costs of Children with Disabilities.
Written professional documentation is important
Before claiming this deduction, families should ask their tax attorney whether they need a written recommendation from the student’s treating physician or another qualified clinician.
When clinically accurate, documentation may address:
- The diagnosed impairment or condition;
- How the condition affects learning or functioning;
- Why a specialized school environment is recommended;
- Why Bridges’ individualized program is appropriate; and
- Why specialized instruction and support are a primary reason for attendance.
The recommendation should come from the family’s treating professional—not from Bridges.
This is an itemized medical deduction
This potential benefit is not an automatic tuition credit or a dollar-for-dollar refund. Medical expenses are generally reported on Schedule A, and only the qualifying expenses above 7.5% of adjusted gross income are deductible. The family must also itemize rather than take the standard deduction for the medical expenses to affect the federal return. (IRS)
Avoid Using the Same Expense for Two Tax Benefits
Families should not assume that the same tuition dollars can support both:
- A tax-free 529 or ABLE distribution; and
- A medical-expense deduction.
The IRS generally does not allow a taxpayer to use the same expense for more than one tax-free exclusion, credit, or deduction. A tax attorney can help allocate tuition among 529 funds, ABLE funds, financial aid, personal payments, and any amount that may remain eligible for an itemized medical deduction. (IRS)
A Practical Planning Checklist for Families
Before moving money, families should:
- Consult a qualified tax attorney or licensed tax professional. Ask for an analysis of federal and Oregon treatment, not only the federal rules.
- Confirm the student’s eligibility. Direct 529 use does not require a disability diagnosis, but ABLE participation and a special-education medical deduction have separate standards.
- Calculate all calendar-year limits. Include distributions and contributions from every relevant account.
- Gather documentation. Request tuition statements, enrollment records, receipts, and a general Bridges program description.
- Choose the payment method before withdrawing money. Do not take a personal distribution and decide how to characterize it afterward.
- Coordinate timing. Match distributions and qualified expenses within the appropriate calendar year.
- Keep records for each transaction. Maintain separate documentation for 529 distributions, ABLE rollovers, ABLE payments, and personally paid tuition.
- Review the plan annually. Limits, eligibility standards, state conformity rules, and the family’s circumstances can change.
How Bridges Can Help
Bridges can provide:
- Tuition statements;
- Payment schedules;
- Enrollment documentation;
- Payment confirmations and receipts; and
- General information describing our specialized educational program.
Bridges cannot provide financial, tax, accounting, or legal advice; determine a student’s ABLE eligibility; issue a medical recommendation; calculate a deduction; or guarantee the federal or Oregon tax treatment of a payment.
Families should have their proposed strategy reviewed by a qualified tax attorney or licensed tax professional before transferring or withdrawing funds.
Choosing the right school for a neurodivergent learner is deeply personal. Understanding the financial tools that may be available can help families approach that decision with greater clarity, confidence, and care.
Belong. Learn. Soar.
Helpful Resources
- IRS Topic No. 313: Qualified Tuition Programs and 529 Plans (IRS)
- IRS Publication 907: Tax Highlights for Persons With Disabilities (IRS)
- IRS Publication 502: Medical and Dental Expenses (IRS)
- Oregon ABLE Savings Program: 529-to-ABLE Rollover Guidance (oregonablesavings.com)
- Oregon ABLE Eligibility and 2026 Expansion (Oregon.gov Apps)
- Oregon Department of Revenue Individual Income Tax Guide (Oregon)
- Bridges Guide: Deducting Special Education Costs of Children with Disabilities (PDF)