Jumpstart Savings Act

Summary

Creates a new federal tax rule that lets states offer tax-exempt savings accounts to pay for job-related education, certification, tools, and certain business startup costs for a designated beneficiary. The accounts follow many of the same rules as existing tax-preferred education accounts, allow rollovers from traditional 529 tuition accounts, add reporting requirements and penalties, and take effect for taxable years beginning after Dec. 31, 2025.

• Creates a new federal tax provision allowing states to offer tax-exempt savings accounts for job training, certifications, tools, and certain business startup costs.
• New accounts follow many of the same rules as section 529 education accounts (eligibility, distributions, beneficiary changes, reporting).
• Qualified expenses include registered apprenticeships, community college associate/certification program costs, certification/licensure fees, trade tools, and state business startup costs.
• Permits rollovers from existing 529 tuition accounts into the new accounts by beneficiaries or family members.
• Accounts are tax-exempt for Federal income tax but remain subject to unrelated business income tax where applicable.
• Reporting requirements are added for the new accounts and the existing failure-to-report penalty is extended to cover them.
• Amendments update the tax code table of sections and take effect for tax years after Dec. 31, 2025.
• Implementation is at the state level; states must establish accounts under the federal tax framework.