This bill expands the use of 529 education savings accounts to cover expenses related to postsecondary credentialing programs and certifications, offering more flexibility in workforce training investments.
Amy Klobuchar
Senator
MN
The "Freedom to Invest in Tomorrow's Workforce Act" amends Section 529 of the Internal Revenue Code to allow the use of 529 education savings accounts for expenses related to postsecondary credential programs. These programs include workforce training, professional certifications, and licenses. This change expands the definition of qualified higher education expenses to include tuition, fees, books, supplies, equipment, and testing fees associated with recognized postsecondary credentials. The bill aims to make workforce training and professional certifications more accessible and affordable.
529 Savings Accounts Now Cover Job Certifications: 'Freedom to Invest in Tomorrow's Workforce Act' Expands Use
The "Freedom to Invest in Tomorrow's Workforce Act" just changed the game for 529 savings accounts. Before, these accounts were mainly for college tuition and related expenses. Now, this bill lets you use that money for a much wider range of job training and certification programs. Think professional licenses, industry certifications, and even registered apprenticeships.
Leveling Up Your Career, Tax-Free
This bill amends Section 529 of the Internal Revenue Code. It expands the definition of "qualified higher education expenses" to include costs related to "recognized postsecondary credential programs." This means you can use your 529 funds for things like:
- Tuition and fees for certification courses.
- Books, supplies, and equipment needed for these programs.
- Exam fees to get certified.
- Continuing education costs to keep your certification current.
For example, if you are an electrician, the cost of getting an additional license might be covered. Or, a coder who wants to get a specific industry certification to boost their resume, they could use 529 funds. Even a veteran transitioning to civilian life could tap into these savings for relevant credentialing programs. The bill specifically references the Veterans Benefits Administration's WEAMS directory and the Department of Defense's COOL directory as sources for recognized credentials (SEC. 2).
Real-World Wins (and Potential Hitches)
This change could be a big deal for anyone looking to up their skills or switch careers. It makes job training more affordable, and since 529 contributions can be tax-deductible (depending on your state), it's like getting a discount on your professional development. Plus, it recognizes that "higher education" isn't just about a four-year degree anymore.
However, it's worth keeping an eye on how this plays out. The bill relies on existing lists of approved programs, like those under the Workforce Innovation and Opportunity Act (SEC. 2). While this is practical, there is a risk that some programs of questionable value might seek to qualify for 529 funding. So, do your homework before enrolling, just like you would with any educational program. Overall, though, this bill opens up some serious opportunities for folks to invest in their future, tax-free.