New Bill to Change 529 Plans for Registered Apprenticeship Programs

U.S. Capitol Building Front Image by Art Bromage from Pixabay
Image by Art Bromage from Pixabay

Update 5/23/19: A provision based on Norcross and Kelly's Bill to allow 529 tax-free savings plans to be used for apprenticeships was passed through the House with a 417-3 vote as part of H.R. 1994, the Secure Act, a retirement savings bill. 

 

Last week, U.S. Congressmen Donald Norcross (D-NJ) and Mike Kelly (R-PA) introduced bipartisan bill H.R. 2679, "529 Opening Paths To Invest in Our Nations Students (529 Options)."

The bill is designed to make apprenticeships more affordable by allowing individuals enrolled in registered apprenticeship programs to fund tools, equipment and more for the program from a 529 college savings plan.

According to Rep. Norcross, the 529 savings plan is an important tool that helps Americans plan for college costs. However, currently, these savings plans are not allowed to be used for technical training.

"If you want to go to a registered apprenticeship and use the money that you saved, right now, that is not an option," he said. The 529 Options Act is designed to change all of that.

"An apprenticeship program shaped my life, taking me from construction work to Congress," said Norcross, who is the only electrician serving in Congress. Prior to serving in Congress, Rep. Norcross was a business agent for IBEW Local No. 351 and president of the Southern New Jersey AFL-CIO.

"Right now, students and families can use 529 tax-free savings accounts for college, but they can't use those same savings accounts for apprenticeships," he said. "This exclusion is unfair and counterproductive. We need electricians and computer programmers, just like we need doctors and judges, and this bill levels the playing field for the students and future workers who start out in apprenticeships."

"The law should reflect the value of apprenticeship programs just like it does a four-year degree," Rep. Kelly said.

The bill would allow individuals enrolled in a registered apprenticeship to use money from their 529 Education Savings Account to pay for books, supplies, equipment, child care at licensed daycare centers, transportation and obtaining industry certification (or other type of credential in association with enrollment or completion of such program).

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