Bill Details
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This bill would let people use money from a 529 education savings account for certain costs connected to learning a trade. Right now, 529 accounts are mainly for college and other school expenses. Under this proposal, some expenses for tools and other business property used in a qualified trade field could also count as approved education expenses. The idea is to make it easier for students and workers who are training for careers in the trades to use 529 savings to help pay for the equipment they need to get started.
- It adds “qualified business trade expenses” to the list of expenses that can be paid from a 529 account.
- The expenses must be for tangible business property, such as tools or equipment, and not buildings.
- The property must be something that can be depreciated for tax purposes, meaning it loses value over time.
- The trade fields covered are specific industries listed in the bill, including many construction, repair, and related skilled trade jobs.
The change would apply to expenses paid in tax years starting after the law is enacted.
Official Summaries
Fairness for the Trades Act
This 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 those incurred to purchase business property in certain industries. (Some limitations apply.)
Under the bill, tax-free 529 plan distributions may be used to pay for certain property for use by the plan beneficiary in industries within the following industry groups (as classified in the North American Industry Classification System):
- timber tract operations;
- forest nurseries and gathering of forest products;
- logging;
- fishing;
- hunting and trapping;
- support activities for forestry;
- residential and nonresidential building construction;
- utility system construction;
- land subdivision;
- highway, street, and bridge construction;
- other heavy and civil engineering construction;
- foundation, structure, and building exterior contracting;
- building equipment contracting;
- building finishing contracting;
- other specialty trade contracting;
- automotive repair and maintenance;
- electronic and precision equipment repair and maintenance;
- commercial and industrial machinery and equipment (except automotive and electronic) repair and maintenance; and
- personal and household goods repair and maintenance.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 808 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 808
To amend the Internal Revenue Code of 1986 to permit qualified business
trade expenses to be treated as qualified higher education expenses for
purposes of 529 accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 28, 2025
Ms. Perez (for herself and Mr. Edwards) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to permit qualified business
trade expenses to be treated as qualified higher education expenses for
purposes of 529 accounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fairness for the Trades Act''.
SEC. 2. QUALIFIED BUSINESS TRADE EXPENSES TREATED AS QUALIFIED HIGHER
EDUCATION EXPENSES FOR PURPOSES OF 529 ACCOUNTS.
(a) In General.--Section 529(e)(3) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(C) Qualified business trade expenses.--The term
`qualified higher education expenses' includes
qualified business trade expenses (as defined in
subsection (f)).''.
(b) Qualified Business Trade Expenses.--Section 529 is amended by
redesignating subsection (f) as subsection (g) and by inserting after
subsection (e) the following new subsection:
``(f) Qualified Business Trade Expenses.--For purposes of this
section--
``(1) In general.--The term `qualified post business trade
expenses' means amounts paid by the designated beneficiary for
specified business property used by the designated beneficiary
in a qualified trade field.
``(2) Specified business property.--The term `specified
business property' means tangible property (other than
buildings) which is of a character subject to the allowance for
depreciation.
``(3) Qualified trade field.--The term `qualified trade
field' means any field which is described by one of the
following National industry codes of the North American
Industry Classification System: 113110, 113210, 113310, 114111,
114112, 114119, 114210, 115310, 236115, 236116, 236117, 236118,
236210, 236220, 237110, 237120, 237130, 237210, 237310, 237990,
238110, 238120, 238130, 238140, 238150, 238160, 238170, 238190,
238210, 238220, 238290, 238310, 238320, 238330, 238340, 238350,
238390, 238910, 238990, 811111, 811114, 811198, 811210, 811310,
811411, 811412, 811420, 811430, or 811490.''.
(c) Effective Date.--The amendments made by this section shall
apply to expenses paid in taxable years beginning after the date of the
enactment of this Act.
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