TCJA Permanency Act
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TCJA Permanency Act
Updated 6 hours ago
Last progress January 3, 2025 (1 year ago)
Updated 7 hours ago
Last progress February 4, 2025 (1 year ago)
Last progress January 20, 2025 (1 year ago)
Introduced on January 20, 2025 by Rafael Edward Cruz
Updated 6 hours ago
Last progress July 4, 2025 (7 months ago)
Read twice and referred to the Committee on Finance.
Allows 529 college savings plan funds to be used tax‑free for a broader set of K–12 expenses. Eligible items explicitly include tuition, curriculum and online materials, certain tutoring and testing fees, dual‑enrollment fees, and educational therapies for students with disabilities. Distributions for these expenses are allowed after the law takes effect. This amends the Internal Revenue Code’s 529 rules so account owners can withdraw funds for specified elementary and secondary education costs without federal tax on the distribution when used for the listed purposes.
Amends the Internal Revenue Code of 1986 by replacing the text of Section 529(c)(7) to expand the meaning of “qualified higher education expense” to include certain elementary and secondary expenses.
Defines that references to the term “qualified higher education expense” include specified expenses related to enrollment or attendance at, or for students enrolled at or attending, an elementary or secondary public, private, or religious school.
Tuition for elementary and secondary school is included as a qualified expense.
Curriculum and curricular materials are included as qualified expenses.
Books or other instructional materials are included as qualified expenses.
Primary impacts: Families who own 529 accounts can withdraw funds tax‑free for a broader array of K–12 costs, reducing out‑of‑pocket expenses for tuition, curriculum materials, online programs, tutoring, testing fees, dual‑enrollment, and certain educational therapies for students with disabilities. Students with disabilities may see improved access to covered educational therapies when families have 529 savings. K–12 service providers (tutors, testing services, dual‑enrollment programs, curriculum vendors) may see increased demand as families use tax‑advantaged funds to pay for services.
Administrative and fiscal impacts: 529 plan administrators and custodians will need to update plan documents, distribution categories, and verification processes. Federal tax receipts may decline modestly because more distributions will be tax‑favored; the provision does not specify offsets. States that use federal 529 definitions for state tax or deduction purposes may adapt automatically; states that do not conform could treat these distributions differently for state tax purposes. Equity considerations: Because 529 tax benefits primarily help families who can save in advance, the change may disproportionately benefit higher‑income households unless paired with broader access or targeted savings supports. The amendment is narrowly focused and does not create new federal grant programs or mandates on states.