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ACE Act
2/25/2025, 5:08 AM
Summary of Bill HR 750
One of the key provisions of the bill is the expansion of tax credits for education expenses. Under the proposed legislation, individuals would be eligible for a tax credit for up to 50% of qualified education expenses, such as tuition, fees, and books. This credit would be available for both undergraduate and graduate education, providing a significant financial incentive for individuals to further their education.
Additionally, the bill includes provisions for tax-free savings accounts specifically designated for education expenses. These accounts, known as Education Savings Accounts (ESAs), would allow individuals to save money for education expenses on a tax-free basis. Contributions to these accounts would be deductible from taxable income, and withdrawals for education expenses would not be subject to taxation. Overall, Bill 119 HR 750 aims to make higher education more accessible and affordable for individuals by providing tax incentives and benefits. By expanding tax credits for education expenses and creating tax-free savings accounts for education, the bill seeks to encourage individuals to pursue higher education and invest in their future.
Congressional Summary of HR 750
Student Empowerment Act
This bill expands the expenses that may be paid for with tax-free distributions from a qualified tuition program (known as a 529 plan) to include certain elementary, secondary, and homeschool education expenses and makes other changes related to 529 plans. The bill also limits the tax exclusion for interest on state or local bonds.
Under current law, 529 plan distributions are excluded from gross income if they are used to pay for qualified higher education expenses, which includes up to $10,000 (per year and per beneficiary) for tuition at an elementary or secondary public, private, or religious school.
The bill expands the expenses that may be paid for with tax-free 529 plan distributions to include homeschooling tuition and the following expenses related to elementary, secondary, and homeschool education:
- curriculum,
- books,
- instructional and online educational materials,
- tutoring or educational classes outside the home,
- testing fees,
- fees for dual enrollment in a higher education institution, and
- educational therapies for disabled students.
The bill also increases the amount of tax-free 529 plan distributions that may be used to pay for elementary, secondary, and homeschool education expenses to $20,000.
The bill increases the annual gift tax exclusion by $20,000 for contributions made to a 529 plan. (Under current law, up to $19,000 may be excluded from taxable gifts in 2025.)
Finally, the bill limits the tax exclusion for interest on state or local bonds to bonds issued by states that meet minimum school choice requirements or political subdivisions of the states.
Read the Full Bill
Current Status of Bill HR 750
Bipartisan Support of Bill HR 750
Total Number of Sponsors
2Democrat Sponsors
0Republican Sponsors
2Unaffiliated Sponsors
0Total Number of Cosponsors
4Democrat Cosponsors
0Republican Cosponsors
4Unaffiliated Cosponsors
0Policy Area and Potential Impact of Bill HR 750
Primary Policy Focus
Alternate Title(s) of Bill HR 750
Comments
Trenton Rao
10 months ago
So, like, what's the deal with this bill? Will it actually help me with my education costs or what? #confused 🤔
