Summary

Adds "qualified business trade expenses" to the list of tax-free qualified expenses that can be paid from section 529 education savings accounts. The change lets a designated beneficiary use 529 plan distributions to buy certain tangible, depreciable business property (not buildings) used in enumerated trade fields identified by NAICS codes. The change applies to expenses paid in taxable years beginning after the date of enactment.

Key Points

• Expands 529 plan qualified expenses to include certain business equipment purchased by the beneficiary.
• Eligible property is limited to tangible, depreciable items and expressly excludes buildings.
• Qualifying trades are defined by a list of NAICS industry codes covering a wide range of skilled trades and repair sectors.
• Applies only to expenses paid in taxable years beginning after enactment.
• Creates a tax-advantaged way to buy tools, machinery, and other trade equipment using existing 529 funds.
• May require 529 plan administrators and taxpayers to track NAICS codes and documentation of business use.
• Benefits those who have 529 balances and pursue careers or businesses in the enumerated trade fields.
• Does not change contribution limits, overall 529 rules, or extend to non-depreciable items or buildings.

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