To amend the Internal Revenue Code of 1986 to permit qualified distributions from section 529 plans for certain transportation and parking expenses.
Impact
If enacted, HB8438 will impact how families can utilize 529 plans, encouraging more flexibility in covering costs involved with attending educational institutions. This proposal addresses an increasing concern among legislators regarding the financial burdens placed on students and families, specifically in connection with commuting costs to schools and training programs. By broadening the use of these funds, more families may find it feasible to enroll their children in various educational opportunities.
Summary
House Bill 8438 aims to amend the Internal Revenue Code of 1986 by allowing qualified distributions from section 529 plans not only for educational expenses but also for certain transportation and parking costs. This change will enable families utilizing 529 plans to cover a broader range of expenses associated with education, thus facilitating access to educational institutions that may not have adequate public transportation options available.
Contention
While the intent behind the bill is to support families' educational journeys, some may argue that expanding the types of expenses covered could lead to misuse of 529 funds for non-educational purposes. Additionally, there may be debates surrounding the extent of federal involvement in state education financing. Opponents might raise concerns about accountability and monitoring of additional expenses covered, arguing that it could dilute the purpose of 529 savings plans, which were originally intended to encourage saving specifically for education costs.
To amend the Internal Revenue Code of 1986 to treat distributions from health savings accounts for funeral expenses of the account beneficiary as qualified distributions.
A bill to amend the Internal Revenue Code of 1986 to increase the limitation on distributions from 529 accounts for qualified higher education expenses.
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.
To amend the Internal Revenue Code of 1986 to treat distributions from health savings accounts for funeral expenses of the account beneficiary as qualified distributions.