H.R. 7115: Jumpstart Savings Act

This bill, titled the Jumpstart Savings Act, aims to create a new savings program that encourages individuals to save for costs associated with apprenticeship and trade training. The key features of the bill are outlined below:

Establishment of Jumpstart Program

The bill proposes to amend the Internal Revenue Code to introduce the Jumpstart Program. This program is defined as one that is set up by a state or a related government agency, allowing individuals to contribute to an account specifically for educational or training-related expenses. Contributions to this account will be exempt from federal taxation.

Qualified Expenses

The Jumpstart Program account can be used for a variety of qualified expenses, which include:

• Costs associated with completing an apprenticeship program that is registered and certified by the Department of Labor.
• Tuition, fees, books, supplies, and necessary equipment for attending an associate degree or certification program at a community or technical college.
• Fees required for certifications or licenses needed to practice a trade or profession.
• Costs for purchasing tools and equipment that an individual needs to practice their trade or occupation.
• Expenses related to establishing a business necessary for practicing a profession within a state.

Contribution and Tax Rules

The bill states that rules similar to existing guidelines for qualified tuition programs will apply to these Jumpstart Accounts. Contributions made to the accounts will not be taxed, providing a financial incentive for individuals to save for their training and education.

Report Requirements

Those managing the Jumpstart Program will have obligations to report contributions and distributions, ensuring transparency and compliance with the rules set forth in the legislation.

Rollovers from Qualified Tuition Programs

The bill also allows individuals to transfer funds from existing qualified tuition programs into a Jumpstart Program. This provides flexibility for those looking to reallocate their savings towards trade or apprenticeship training.

Effective Date

The provisions of the Jumpstart Savings Act will apply to taxable years beginning after December 31, 2025, meaning its impact will commence in the following tax year.

Relevant Companies

None found.