Overview
Title
To amend the Internal Revenue Code of 1986 to treat certain postsecondary credentialing expenses as qualified higher education expenses for purposes of 529 accounts.
ELI5 AI
H.R. 1151 wants to change the rules so that people can use special savings called 529 accounts to pay for certain school programs that help them learn new skills for work, like tests and classes. These programs are chosen by the government to help people find good jobs.
Summary AI
H.R. 1151 proposes changes to the Internal Revenue Code of 1986 to allow certain postsecondary credentialing expenses to be classified as qualified higher education expenses for 529 savings accounts. This means that tuition, fees, books, and supplies for recognized credential programs, as well as testing and continuing education fees needed for these credentials, will be covered. The bill defines recognized postsecondary credential programs as those listed by the Workforce Innovation and Opportunity Act, Veterans Affairs, or other reputable sources. The bill is designed to support individuals investing in skills for workforce development.
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AnalysisAI
The bill titled "Freedom to Invest in Tomorrow’s Workforce Act" is legislation aimed at amending the Internal Revenue Code of 1986. Its main objective is to expand the use of 529 accounts to include certain postsecondary credentialing expenses as qualified higher education expenses. Recognized credential programs and certifications that can now receive distributions from 529 accounts include tuition, fees for necessary testing, and continuing education related to postsecondary credentials. This extends financial support for individuals pursuing programs listed on state-provided directories and certain recognized programs.
General Summary of the Bill
The bill proposes to designate specific postsecondary credentialing expenses as "qualified higher education expenses" that can benefit from 529 accounts. This change aims to provide more flexibility and financial support to those pursuing postsecondary credentials. By expanding the definition, the bill seeks to include tuition and fees associated with recognized credential programs, essential testing fees, and ongoing education required for maintaining these credentials. These changes will apply to any distributions made from 529 accounts after the bill is enacted.
Summary of Significant Issues
Several significant issues emerge from the bill. Firstly, the definition of what qualifies as a "recognized postsecondary credential" is linked to external directories and lists managed by various government bodies. These can become outdated or poorly maintained, potentially creating confusion or disparities in the bill’s application.
Additionally, the bill grants discretion to the Secretary of the Treasury and the Secretary of Labor to identify reputable programs. This reliance on individual judgment could lead to favoritism or bias toward certain credentialing programs unless monitored transparently.
The bill also heavily references multiple external statutes, acts, and directories. This interconnectedness can make understanding the legal text challenging for individuals without access to these materials, potentially hindering public comprehension of their rights and responsibilities.
Impact on the Public and Stakeholders
For the broader public, this bill could extend opportunities for individuals seeking postsecondary credentials by making it easier to use 529 accounts to finance a wider range of educational expenses. This could encourage more people to pursue vocational training and certification, potentially enhancing workforce skills.
Specific stakeholders, such as educational institutions offering recognized credential programs, may benefit from increased enrollment as accessing funds becomes more straightforward for prospective students. However, programs not easily identifiable on relevant state or federal directories may face challenges.
Overall, while the bill aims to support workforce development and broaden educational opportunities, its reliance on external directives and discretionary decisions necessitates careful implementation and ongoing oversight to ensure equitable access and prevent potential biases.
Issues
The definition of 'qualified postsecondary credentialing expenses' in Section 2 is highly dependent on external directories and lists maintained by various government bodies, which might become outdated or inconsistently maintained, potentially leading to confusion or inequities in implementation.
The determination of what constitutes a 'recognized postsecondary credential program' under Section 2 is heavily reliant on the discretion and judgment of the Secretary, in consultation with the Secretary of Labor. This could open doors for favoritism or bias toward certain credentialing programs if not transparently managed.
The use of multiple cross-references to other sections, acts, and external directories in Section 2 can make the legal text difficult to navigate without supplementary materials, posing challenges for individuals attempting to understand their rights and obligations under the law.
The language in Section 1 does not offer clarity or insight into the act's overall impact, objectives, or potential consequences, which can hinder public understanding and the ability to foresee any potential issues related to the act.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
This section specifies the short title of the Act, which is the “Freedom to Invest in Tomorrow’s Workforce Act.”
2. Certain postsecondary credentialing expenses treated as qualified higher education expenses for purposes of 529 accounts Read Opens in new tab
Summary AI
Certain postsecondary credentialing expenses are now considered "qualified higher education expenses" under 529 accounts, including costs for tuition, fees, and supplies required for recognized postsecondary credential programs, as well as fees for necessary testing and continuing education. This change applies to distributions made after the law's enactment, expanding the definition to support various recognized credential programs and certifications.