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A bill to amend the Internal Revenue Code of 1986 to provide incentives for education.
2/13/2025, 11:56 AM
Summary of Bill S 311
One of the key provisions of the bill is the creation of new tax credits for individuals who are paying for higher education expenses. These credits would help offset the costs of tuition, fees, and other related expenses. Additionally, the bill includes provisions for tax deductions for student loan interest payments, making it easier for individuals to manage their student loan debt.
Furthermore, the bill seeks to expand the availability of tax-advantaged savings accounts for education, such as 529 plans. These accounts would allow individuals to save for education expenses on a tax-deferred basis, providing a valuable tool for families looking to plan for their children's future education. Overall, Bill 119 s 311 aims to make higher education more accessible and affordable for individuals and families by providing tax incentives and benefits. By encouraging individuals to pursue education and invest in their future, the bill seeks to promote economic growth and prosperity for all Americans.
Congressional Summary of S 311
Achieving Choice in Education Act or the ACE 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 such states.
