Student Empowerment Act
Student Empowerment Act
Plain Language Summary
# Student Empowerment Act - Plain Language Summary **What the Bill Would Do** The Student Empowerment Act would expand what families can buy with money from 529 college savings plans without paying taxes on those withdrawals. Currently, 529 plans allow tax-free withdrawals for up to $10,000 per year toward K-12 tuition at public, private, or religious schools. This bill would add homeschooling tuition and a broader range of education expenses—including textbooks, curriculum materials, online courses, tutoring, testing fees, and dual enrollment programs—as eligible uses for tax-free distributions from these accounts. **Who It Affects** This bill primarily affects families who use 529 plans to save for education expenses.
It would benefit families with school-age children (elementary through high school) and those who homeschool, by giving them more flexibility in how they spend their education savings and reducing their tax burden. The changes could particularly help families pursuing non-traditional education options like homeschooling or online learning. **Current Status** The bill (S. 152) was introduced in the 119th Congress by Senator Ted Cruz (R-TX) and is currently in committee, meaning it has not yet been debated or voted on by the full Senate.
CRS Official Summary
Student Empowerment ActThis bill expands the education-related expenses that may be paid for with tax-free distributions from a qualified tuition program (also known as a 529 plan) to include certain expenses related to elementary, secondary, and homeschool education.Under current law, distributions from a 529 plan 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 education-related expenses that may be paid for with tax-free distributions from a 529 plan to include tuition related to homeschooling and the following expenses related to elementary, secondary, and homeschool education:curriculum and curricular materials,books or other instructional materials,online educational materials,tutoring or educational classes outside the home,testing fees,fees for dual enrollment in an institution of higher education, andeducational therapies for students with disabilities.
Latest Action
Read twice and referred to the Committee on Finance.