Plain Language Summary
# ACE Act Summary The **Achieving Choice in Education Act (HR 750)** would expand what families can pay for using 529 college savings plans with tax-free money. Currently, 529 plans allow up to $10,000 per year in tax-free withdrawals for private or religious K-12 school tuition. This bill would add homeschooling expenses to that list, plus cover related costs like curriculum materials, books, tutoring, online courses, and testing fees. The bill also makes changes to how state and local bonds are taxed. **Who it affects:** Families who use 529 plans to save for education, particularly those considering or using homeschooling or private school options.
The bill offers them more flexibility in how they can use these tax-advantaged savings accounts. **Current status:** The bill is currently in committee (H.R. 750 in the 119th Congress), sponsored by Rep. Eric Burlison (R-MO). It has not yet been voted on by the full House.
CRS Official Summary
Achieving Choice in Education Act or the ACE ActThis bill expands the expenses that may be paid for with tax-free distributions from a qualified tuition program (known as a 529 plan) to include certain elementary, secondary, and homeschool education expenses and makes other changes related to 529 plans. The bill also limits the tax exclusion for interest on state or local bonds.Under current law, 529 plan distributions are excluded from gross income if they are used to pay for qualified higher education expenses, which includes up to $10,000 (per year and per beneficiary) for tuition at an elementary or secondary public, private, or religious school.The bill expands the expenses that may be paid for with tax-free 529 plan distributions to include homeschooling tuition and the following expenses related to elementary, secondary, and homeschool education:curriculum,books,instructional and online educational materials,tutoring or educational classes outside the home,testing fees,fees for dual enrollment in a higher education institution, andeducational therapies for disabled students.The bill also increases the amount of tax-free 529 plan distributions that may be used to pay for elementary, secondary, and homeschool education expenses to $20,000.The bill increases the annual gift tax exclusion by $20,000 for contributions made to a 529 plan. (Under current law, up to $19,000 may be excluded from taxable gifts in 2025.)Finally, the bill limits the tax exclusion for interest on state or local bonds to bonds issued by states that meet minimum school choice requirements or political subdivisions of such states.
Latest Action
Referred to the House Committee on Ways and Means.