Sponsor
Eric Stephen Schmitt
Senator · R-MO
Senator · R-MO
The bill attempts to clarify 529 plan limits starting in 2026, but a malformed numeric insertion risks creating economic uncertainty for savers and will likely require IRS guidance or corrective action, imposing administrative costs.
Parents and savers (families) get updated statutory text for 529 plan contribution/benefit limits effective in 2026, which aims to reduce legal ambiguity about tax treatment of 529 accounts.
Parents, taxpayers, and 529 plan administrators face uncertainty because the inserted numeric language is garbled and could change or obscure the existing monetary limit for 529 plans, affecting tax treatment and savings decisions.
The IRS, federal employees, and taxpayers may need new guidance or corrective legislation to interpret or fix the malformed text, creating additional compliance, administrative, and potential legislative costs.
Based on analysis of 2 sections of legislative text.
Replaces a numeric string in the final sentence of 26 U.S.C. § 529, altering the statute's monetary language for 529 plans (drafted text is garbled).
Edits the numeric text in the final sentence of Internal Revenue Code section 529 (rules for qualified tuition programs) to replace a malformed numeric string with a new numeric string; the change is set to take effect for taxable years beginning after December 31, 2025. The bill as drafted contains a garbled numeric replacement that is not an unambiguous, machine- or law-ready monetary amount, creating legal uncertainty about whether and how the numeric contribution/limit in section 529 is being changed.
Official title: Amend the Internal Revenue Code of 1986 to increase the limitation on distributions from 529 accounts for qualified higher education expenses.
Introduced June 30, 2025 by Eric Stephen Schmitt · Last progress June 30, 2025