HR1151-119

What This Bill Does

The Freedom to Invest in Tomorrow's Workforce Act expands tax-preferred 529 education savings accounts beyond traditional college expenses. It adds qualified postsecondary credentialing expenses, including tuition and fees for recognized credential programs, books, supplies, equipment, testing fees required to obtain or maintain a credential, and required continuing education fees. The bill is designed for workers pursuing licenses, certificates, apprenticeships, industry credentials, and continuing education tied to employment rather than only degree programs.

Who Benefits and How

Workers pursuing occupational credentials benefit because 529 funds can be used for credential programs and required exams. 529 account beneficiaries benefit from a broader menu of tax-preferred education and workforce expenses. Credentialing organizations benefit if more workers can afford certification exams, licensing costs, and maintenance fees. Employers needing skilled workers benefit if employees have easier financing for recognized postsecondary credentials.

Who Bears the Burden and How

The Treasury Department and IRS must update 529 guidance, forms, and enforcement rules for credentialing expenses. Federal taxpayers bear revenue loss if more tax-free 529 distributions are used for non-degree workforce training. State 529 plan administrators must update plan materials, eligible-expense controls, and customer support. Workers still bear costs for credentials that are not recognized or expenses that fall outside the statutory definition.

Key Provisions

• Adds qualified postsecondary credentialing expenses to tax-free 529 account distributions.
• Covers recognized credential program tuition, fees, books, supplies, and equipment.
• Includes testing fees and required continuing education fees for obtaining or maintaining credentials.
• Expands 529 savings from degree-centered education costs into workforce credentialing costs.