Legislation Search

H.R. 1151: Freedom to Invest in Tomorrow’s Workforce Act

The bill known as the Freedom to Invest in Tomorrow’s Workforce Act proposes changes to the tax treatment of certain educational expenses related to postsecondary credential programs. Specifically, it aims to allow individuals to use funds from 529 education savings accounts to cover eligible costs associated with obtaining recognized postsecondary credentials.

Key Provisions of the Bill

The bill includes several main components:

Modification of 529 Accounts: The legislation amends the Internal Revenue Code to include specific postsecondary credentialing expenses as qualified higher education expenses under 529 accounts. This allows families to use money saved in these accounts for a broader range of educational expenses.
Definition of Qualified Postsecondary Credentialing Expenses: The term "qualified postsecondary credentialing expenses" is defined to encompass:

Tuition, fees, books, supplies, and equipment required for enrollment in a recognized postsecondary credential program.
Fees for testing required to obtain or maintain a recognized postsecondary credential.
Fees for continuing education necessary for maintaining a recognized postsecondary credential.

Criteria for Recognized Programs: A "recognized postsecondary credential program" must meet certain criteria, such as being listed on state lists prepared under specific workforce acts, being included in a directory maintained by the Department of Veterans Affairs, or requiring an examination for credentialing that is recognized within the industry.
Definition of Recognized Postsecondary Credential: This includes any industry-recognized employment credential, completion certificates from registered apprenticeships, and any occupational or professional licenses recognized by state or federal authorities.

Effective Date

The changes made by this bill would take effect for distributions from 529 accounts made after the bill's enactment date.

Implications

If passed, this legislation would provide greater flexibility for families saving for education and training costs associated with earning recognized credentials. It aims to support individuals navigating today’s job market, where vocational and technical training is increasingly important.