Us Congress 2025-2026 Regular Session

Us Congress House Bill HB464 Compare Versions

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Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 464
5	5	To amend the Internal Revenue Code of 1986 to provide for lifelong learning
6	6	accounts, and for other purposes.
7	7	IN THE HOUSE OF REPRESENTATIVES
8	8	JANUARY15, 2025
9	9	Mr. T
10	10	HOMPSON of Pennsylvania (for himself, Ms. BONAMICI, Mr.
11	11	F
12	12	ITZPATRICK, and Mr. SCHNEIDER) introduced the following bill; which
13	13	was referred to the Committee on Ways and Means
14	14	A BILL
15	15	To amend the Internal Revenue Code of 1986 to provide
16	16	for lifelong learning accounts, and for other purposes.
17	17	Be it enacted by the Senate and House of Representa-1
18	18	tives of the United States of America in Congress assembled, 2
19	19	SECTION 1. SHORT TITLE. 3
20	20	This Act may be cited as the ‘‘Skills Investment Act 4
21	21	of 2025’’. 5
22	22	SEC. 2. COVERDELL LIFELONG LEARNING ACCOUNTS. 6
23	23	(a) I
24	24	NGENERAL.— 7
25	25	(1) R
26	26	ENAMING OF COVERDELL EDUCATION SAV -8
27	27	INGS ACCOUNTS.—Section 530 of the Internal Rev-9
28	28	enue Code of 1986 is amended— 10
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32	32	(A) by striking ‘‘Coverdell education sav-1
33	33	ings account’’ each place it appears and insert-2
34	34	ing ‘‘Coverdell lifelong learning account’’; and 3
35	35	(B) by striking ‘‘
36	36	COVERDELL EDU -4
37	37	CATION SAVINGS ACCOUNTS ’’ in the heading 5
38	38	and inserting ‘‘
39	39	COVERDELL LIFELONG 6
40	40	LEARNING ACCOUNTS ’’. 7
41	41	(2) C
42	42	ONFORMING AMENDMENTS .— 8
43	43	(A) Section 26(b)(2)(E) of the Internal 9
44	44	Revenue Code of 1986 is amended by striking 10
45	45	‘‘Coverdell education savings accounts’’ and in-11
46	46	serting ‘‘Coverdell lifelong learning accounts’’. 12
47	47	(B) Section 72(e)(9) of such Code is 13
48	48	amended— 14
49	49	(i) by striking ‘‘Coverdell education 15
50	50	savings account’’ and inserting ‘‘Coverdell 16
51	51	lifelong learning account’’; and 17
52	52	(ii) by striking ‘‘C
53	53	OVERDELL EDU -18
54	54	CATION SAVINGS ACCOUNTS ’’ in the head-19
55	55	ing and inserting ‘‘C
56	56	OVERDELL LIFELONG 20
57	57	LEARNING ACCOUNTs’’. 21
58	58	(C) Section 135(c)(2)(C) of such Code is 22
59	59	amended— 23
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63	63	(i) by striking ‘‘Coverdell education 1
64	64	savings account’’ and inserting ‘‘Coverdell 2
65	65	lifelong learning account’’; and 3
66	66	(ii) by striking ‘‘C
67	67	OVERDELL EDU -4
68	68	CATION SAVINGS ACCOUNTS ’’ in the head-5
69	69	ing and inserting ‘‘C
70	70	OVERDELL LIFELONG 6
71	71	LEARNING ACCOUNTS ’’. 7
72	72	(D) Section 408A(e)(2)(A)(ii) of such Code 8
73	73	is amended by striking ‘‘Coverdell education 9
74	74	savings account’’ and inserting ‘‘Coverdell life-10
75	75	long learning account’’. 11
76	76	(E) Section 529(c) of such Code is amend-12
77	77	ed— 13
78	78	(i) by striking ‘‘C
79	79	OVERDELL EDU -14
80	80	CATION SAVINGS ACCOUNTS ’’ in the head-15
81	81	ing of paragraph (3)(B)(vi) and inserting 16
82	82	‘‘C
83	83	OVERDELL LIFELONG LEARNING AC -17
84	84	COUNT’’; and 18
85	85	(ii) by striking ‘‘Coverdell education 19
86	86	savings account’’ in paragraph (6) and in-20
87	87	serting ‘‘Coverdell lifelong learning ac-21
88	88	count’’. 22
89	89	(F) Section 877A(e)(2) of such Code is 23
90	90	amended by striking ‘‘Coverdell education sav-24
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94	94	ings account’’ and inserting ‘‘Coverdell lifelong 1
95	95	learning account’’. 2
96	96	(G) Section 4973 of such Code is amend-3
97	97	ed— 4
98	98	(i) by striking ‘‘Coverdell education 5
99	99	savings account’’ each place it appears in 6
100	100	subsections (a)(4) and (e)(2)(A) and in-7
101	101	serting ‘‘Coverdell lifelong learning ac-8
102	102	count’’; 9
103	103	(ii) by striking ‘‘Coverdell education 10
104	104	savings accounts’’ in subsection (e)(1) and 11
105	105	inserting ‘‘Coverdell lifelong learning ac-12
106	106	counts’’; and 13
107	107	(iii) by striking ‘‘C
108	108	OVERDELLEDU-14
109	109	CATIONSAVINGSACCOUNTS’’ in the head-15
110	110	ing of subsection (e) and inserting 16
111	111	‘‘C
112	112	OVERDELLLIFELONGLEARNINGAC-17
113	113	COUNT’’. 18
114	114	(H) Section 4975 of such Code is amend-19
115	115	ed— 20
116	116	(i) by striking ‘‘Coverdell education 21
117	117	savings account’’ each place it appears in 22
118	118	subsections (c)(5) and (e)(1)(F) and in-23
119	119	serting ‘‘Coverdell lifelong learning ac-24
120	120	count’’; and 25
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124	124	(ii) by striking ‘‘COVERDELL EDU -1
125	125	CATION SAVINGS ACCOUNTS ’’ in the head-2
126	126	ing of subsection (c)(5) and inserting 3
127	127	‘‘C
128	128	OVERDELL LIFELONG LEARNING AC -4
129	129	COUNTS’’. 5
130	130	(I) Section 6693(a)(2)(F) of such Code is 6
131	131	amended by striking ‘‘Coverdell education sav-7
132	132	ings accounts’’ and inserting ‘‘Coverdell lifelong 8
133	133	learning accounts’’. 9
134	134	(J) The table of sections for part VIII of 10
135	135	subchapter F of chapter 1 of such Code is 11
136	136	amended by striking ‘‘Coverdell education sav-12
137	137	ings accounts’’ and inserting ‘‘Coverdell lifelong 13
138	138	learning accounts’’. 14
139	139	(3) T
140	140	REATMENT OF EXISTING ACCOUNTS .—For 15
141	141	purposes of section 530(b)(1) of the Internal Rev-16
142	142	enue Code of 1986, any account established before 17
143	143	January 1, 2024, and designated as a Coverdell edu-18
144	144	cation savings account shall be deemed to have been 19
145	145	designated as a Coverdell lifelong learning account. 20
146	146	(b) E
147	147	XPANDEDUSE OFACCOUNTS.— 21
148	148	(1) E
149	149	LIGIBLE EXPENSES.— 22
150	150	(A) I
151	151	N GENERAL.—Section 530(b)(2)(A) of 23
152	152	the Internal Revenue Code of 1986 is amended 24
153	153	by striking ‘‘and’’ at the end of clause (i), by 25
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157	157	striking the period at the end of clause (ii) and 1
158	158	inserting ‘‘, and’’, and by adding at the end the 2
159	159	following new clause: 3
160	160	‘‘(iii) qualified educational or skill de-4
161	161	velopment expenses (as defined in para-5
162	162	graph (5)).’’. 6
163	163	(B) Q
164	164	UALIFIED EDUCATIONAL OR SKILL 7
165	165	DEVELOPMENT EXPENSES .—Section 530(b) of 8
166	166	such Code is amended by adding at the end the 9
167	167	following new paragraph: 10
168	168	‘‘(5) Q
169	169	UALIFIED EDUCATIONAL OR SKILL DE -11
170	170	VELOPMENT EXPENSES .—The term ‘qualified edu-12
171	171	cational or skill development expenses’ means— 13
172	172	‘‘(A) expenses paid or incurred— 14
173	173	‘‘(i) after the beneficiary attains age 15
174	174	16, and 16
175	175	‘‘(ii) for participation or enrollment of 17
176	176	the beneficiary in services or activities that 18
177	177	are— 19
178	178	‘‘(I) training services described in 20
179	179	section 134(c)(3)(D) of the Workforce 21
180	180	Innovation and Opportunity Act (29 22
181	181	U.S.C. 3174(c)(3)(D)) that are of-23
182	182	fered by a provider included on the 24
183	183	list of eligible providers of training 25
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187	187	services described in section 122 of 1
188	188	such Act (29 U.S.C. 3152), 2
189	189	‘‘(II) career and technical edu-3
190	190	cation activities defined in section 3 of 4
191	191	the Carl D. Perkins Career and Tech-5
192	192	nical Education Act of 2006 (20 6
193	193	U.S.C. 2302) that are offered through 7
194	194	an eligible institution (as defined in 8
195	195	such section), 9
196	196	‘‘(III) career services described in 10
197	197	clauses (iii), (iv), and (xi) of section 11
198	198	134(c)(2)(A) of the Workforce Inno-12
199	199	vation and Opportunity Act (29 13
200	200	U.S.C. 3174(c)(2)(A)) that are pro-14
201	201	vided by providers eligible under sec-15
202	202	tion 134(c)(2)(C) of such Act, 16
203	203	‘‘(IV) youth activities described 17
204	204	in section 129(c)(2) of the Workforce 18
205	205	Innovation and Opportunity Act (29 19
206	206	U.S.C. 3164(c)(2)) that are provided 20
207	207	by eligible providers of youth work-21
208	208	force investment activities under sec-22
209	209	tion 123 of such Act, or 23
210	210	‘‘(V) adult education and literacy 24
211	211	activities, as defined in section 203 of 25
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215	215	the Adult Education and Family Lit-1
216	216	eracy Act (29 U.S.C. 3272), that are 2
217	217	provided by eligible providers of adult 3
218	218	education and literacy activities under 4
219	219	section 231 of such Act (29 U.S.C. 5
220	220	3321), 6
221	221	‘‘(B) expenses for transportation required 7
222	222	for or provided by any of the services or activi-8
223	223	ties described in subparagraph (A), 9
224	224	‘‘(C) expenses for testing necessary for en-10
225	225	rollment in, or certification in connection with, 11
226	226	services or activities described in subparagraph 12
227	227	(A), or 13
228	228	‘‘(D) expenses for the purchase of any 14
229	229	computer software (as defined by section 15
230	230	197(e)(3)(B)), computer or peripheral equip-16
231	231	ment (as defined by section 168(i)(2)(B)), fiber 17
232	232	optic cable related to computer use, internet ac-18
233	233	cess and related services, if such software, 19
234	234	equipment, or services are to be used by the 20
235	235	beneficiary for services or activities described in 21
236	236	subparagraph (A) during any of the years the 22
237	237	beneficiary is participating in or enrolled in any 23
238	238	of the services or activities described in sub-24
239	239	paragraph (A).’’. 25
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243	243	(c) MODIFICATION OFRULESRELATING TOAGERE-1
244	244	STRICTIONS ANDCONTRIBUTIONS.— 2
245	245	(1) $10,000
246	246	ACCOUNT LIMIT AFTER AGE 30 .— 3
247	247	(A) I
248	248	N GENERAL.—Subparagraph (E) of 4
249	249	section 530(b)(1) of the Internal Revenue Code 5
250	250	of 1986 is amended by inserting ‘‘in excess of 6
251	251	$10,000’’ after ‘‘any balance to the credit of 7
252	252	the designated beneficiary’’. 8
253	253	(B) C
254	254	ONTRIBUTION LIMIT.—Subparagraph 9
255	255	(A) of section 530(b)(1) of such Code is amend-10
256	256	ed by striking ‘‘or’’ at the end of clause (ii), by 11
257	257	striking the period at the end of clause (iii) and 12
258	258	inserting ‘‘, or’’, and by adding at the end the 13
259	259	following new clause: 14
260	260	‘‘(iv) in the case of a beneficiary who 15
261	261	is over the age of 30, if such contribution 16
262	262	would result in the balance of the account 17
263	263	exceeding $10,000.’’. 18
264	264	(2) I
265	265	NCREASED AGE LIMIT FOR CONTRIBU -19
266	266	TIONS.—Clause (ii) of section 530(b)(1)(A) of the 20
267	267	Internal Revenue Code of 1986 is amended by strik-21
268	268	ing ‘‘age 18’’ and inserting ‘‘age 70’’. 22
269	269	(3) I
270	270	NCREASED CONTRIBUTION LIMITATION 23
271	271	FOR INDIVIDUALS OVER AGE 30 .— 24
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275	275	(A) I N GENERAL .—Section 1
276	276	530(b)(1)(A)(iii) of the Internal Revenue Code 2
277	277	of 1986 is amended by inserting ‘‘($4,000 in 3
278	278	the case of an account the designated bene-4
279	279	ficiary of which has attained age of 30 before 5
280	280	the end of the taxable year)’’ after ‘‘$2,000’’. 6
281	281	(B) C
282	282	ONFORMING AMENDMENT .—Section 7
283	283	4973(e)(1)(A) of such Code is amended by 8
284	284	striking ‘‘$2,000’’ and inserting ‘‘the limitation 9
285	285	applicable under section 530(b)(1)(A)(iii)’’. 10
286	286	(4) N
287	287	O CHANGE IN BENEFICIARY AFTER AGE 11
288	288	30.—Paragraph (6) of section 530(d) of the Internal 12
289	289	Revenue Code of 1986 is amended by striking ‘‘shall 13
290	290	not be treated as a distribution for purposes of para-14
291	291	graph (1) if the new beneficiary’’ and inserting 15
292	292	‘‘shall not be treated as a distribution for purposes 16
293	293	of paragraph (1) if— 17
294	294	‘‘(A) the old beneficiary has not attained 18
295	295	age 30 before the date of the change in bene-19
296	296	ficiary, and 20
297	297	‘‘(B) the new beneficiary’’. 21
298	298	(d) C
299	299	REDIT FOREMPLOYERCONTRIBUTIONS.— 22
300	300	(1) I
301	301	N GENERAL.—Subpart D of part IV of 23
302	302	subchapter A of chapter 1 of the Internal Revenue 24
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306	306	Code of 1986 is amended by adding at the end the 1
307	307	following new section: 2
308	308	‘‘SEC. 45BB. EMPLOYEE EDUCATIONAL SKILLS AND DEVEL-3
309	309	OPMENT EXPENSES. 4
310	310	‘‘(a) G
311	311	ENERALRULE.—For purposes of section 38, 5
312	312	the employee educational skills and development contribu-6
313	313	tion credit determined under this section for any taxable 7
314	314	year is 25 percent of the nonelective contributions made 8
315	315	by the taxpayer during the taxable year to a Coverdell life-9
316	316	long learning account (as defined in section 530(b)) the 10
317	317	designated beneficiary of which is an employee of the tax-11
318	318	payer. 12
319	319	‘‘(b) S
320	320	PECIALRULES ANDDEFINITIONS.—For pur-13
321	321	poses of this section— 14
322	322	‘‘(1) E
323	323	MPLOYEE.— 15
324	324	‘‘(A) C
325	325	ERTAIN EMPLOYEES EXCLUDED .— 16
326	326	The term ‘employee’ shall not include— 17
327	327	‘‘(i) an employee within the meaning 18
328	328	of section 401(c)(1), 19
329	329	‘‘(ii) any 2-percent shareholder (as de-20
330	330	fined in section 1372(b)) of an S corpora-21
331	331	tion, 22
332	332	‘‘(iii) any 5-percent owner (as defined 23
333	333	in section 416(i)(1)(B)(i)) of taxpayer, or 24
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337	337	‘‘(iv) any individual who bears any of 1
338	338	the relationships described in subpara-2
339	339	graphs (A) through (G) of section 3
340	340	152(d)(2) to, or is a dependent described 4
341	341	in section 152(d)(2)(H) of, an individual 5
342	342	described in clause (i), (ii), or (iii). 6
343	343	‘‘(B) L
344	344	EASED EMPLOYEES .—The term 7
345	345	‘employee’ shall include a leased employee with-8
346	346	in the meaning of section 414(n). 9
347	347	‘‘(2) N
348	348	ONELECTIVE CONTRIBUTION .—The term 10
349	349	‘nonelective contribution’ means an employer con-11
350	350	tribution other than an employer contribution pursu-12
351	351	ant to a salary reduction arrangement. 13
352	352	‘‘(3) A
353	353	GGREGATION AND OTHER RULES MADE 14
354	354	APPLICABLE.— 15
355	355	‘‘(A) A
356	356	GGREGATION RULES .—All employ-16
357	357	ers treated as a single employer under sub-17
358	358	section (b), (c), (m), or (o) of section 414 shall 18
359	359	be treated as a single employer for purposes of 19
360	360	this section. 20
361	361	‘‘(B) O
362	362	THER RULES.—Rules similar to the 21
363	363	rules of subsections (c), (d), and (e) of section 22
364	364	52 shall apply.’’. 23
365	365	(2) C
366	366	REDIT TREATED AS PART OF GENERAL 24
367	367	BUSINESS CREDIT.—Section 38(b) of such Code is 25
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371	371	amended by striking ‘‘plus’’ at the end of paragraph 1
372	372	(40), by striking the period at the end of paragraph 2
373	373	(41) and inserting ‘‘, plus’’, and by adding at the 3
374	374	end the following new paragraph: 4
375	375	‘‘(42) the employee educational skills and devel-5
376	376	opment contribution credit determined under section 6
377	377	45BB(a).’’. 7
378	378	(3) C
379	379	LERICAL AMENDMENT .—The table of sec-8
380	380	tions for subpart D of part IV of subchapter A of 9
381	381	chapter 1 of such Code is amended by adding at the 10
382	382	end the following new item: 11
383	383	‘‘Sec. 45BB. Employee educational skills and development expenses.’’.
384	384	(e) ALLOWANCE OF DEDUCTION FOR BENE-12
385	385	FICIARY.— 13
386	386	(1) I
387	387	N GENERAL.—Part VIII of subchapter B 14
388	388	of chapter 1 of the Internal Revenue Code of 1986 15
389	389	is amended by redesignating section 224 as section 16
390	390	225 and by inserting after section 223 the following 17
391	391	new section: 18
392	392	‘‘SEC. 224. COVERDELL LIFELONG LEARNING ACCOUNT 19
393	393	CONTRIBUTIONS. 20
394	394	‘‘(a) I
395	395	NGENERAL.—In the case of an individual 21
396	396	who— 22
397	397	‘‘(1) is the designated beneficiary of a Coverdell 23
398	398	lifelong learning account (as defined in section 24
399	399	530(b)(1)), and 25
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403	403	‘‘(2) has attained the age of 18 before the close 1
404	404	of the taxable year, 2
405	405	there shall be allowed as a deduction an amount equal to 3
406	406	the contributions for the taxable year by or on behalf of 4
407	407	such individual to the account described in paragraph (1). 5
408	408	‘‘(b) R
409	409	ECONTRIBUTED AMOUNTS.—No deduction 6
410	410	shall be allowed under this section with respect to a roll-7
411	411	over contribution described in section 530(d)(5).’’. 8
412	412	(2) I
413	413	NCREASE IN ADDITIONAL TAX .— 9
414	414	(A) I
415	415	NCREASE.— 10
416	416	(i) I
417	417	N GENERAL .—Section 11
418	418	530(d)(4)(A) of the Internal Revenue Code 12
419	419	of 1986 is amended by striking ‘‘10 per-13
420	420	cent’’ and inserting ‘‘20 percent’’. 14
421	421	(ii) C
422	422	ONFORMING AMENDMENT .—Sec-15
423	423	tion 529(c)(6) of such Code is amended by 16
424	424	inserting ‘‘, except that ‘10 percent’ shall 17
425	425	be substituted for ‘20 percent’ in subpara-18
426	426	graph (A) thereof’’ before the period at the 19
427	427	end of the first sentence. 20
428	428	(B) M
429	429	ODIFICATION OF TAX TREATMENT 21
430	430	OF DEDUCTIBLE CONTRIBUTIONS .—Paragraph 22
431	431	(1) of section 530(d) of such Code is amended 23
432	432	to read as follows: 24
433	433	‘‘(1) I
434	434	NCLUSION IN GROSS INCOME .— 25
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438	438	‘‘(A) IN GENERAL.—Any distribution shall 1
439	439	be includible in the gross income of the dis-2
440	440	tributee as follows: 3
441	441	‘‘(i) So much of the distribution as is 4
442	442	equal to or less than the deductible amount 5
443	443	shall be fully included in gross income. 6
444	444	‘‘(ii) So much of the distribution 7
445	445	which exceeds the deductible amount shall 8
446	446	be included in gross income in the manner 9
447	447	as provided in section 72 (determined by 10
448	448	applying such section without regard to 11
449	449	any amounts to which clause (i) applies). 12
450	450	‘‘(B) D
451	451	EDUCTIBLE AMOUNT .—For pur-13
452	452	poses of this paragraph, the term ‘deductible 14
453	453	amount’ means the excess of— 15
454	454	‘‘(i) the sum of contributions to the 16
455	455	account for which a deduction was allowed 17
456	456	under section 224 in such year and any 18
457	457	preceding taxable year, over 19
458	458	‘‘(ii) the amount of distributions to 20
459	459	which subparagraph (A)(i) applied to in 21
460	460	any preceding taxable year.’’. 22
461	461	(3) C
462	462	LERICAL AMENDMENT .—The table of sec-23
463	463	tions for part VIII of subchapter B of chapter 1 of 24
464	464	such Code is amended by redesignating the item re-25
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466	466	ssavage on LAPJG3WLY3PROD with BILLS 16
467	467	•HR 464 IH
468	468	lating to section 224 as relating to section 225 and 1
469	469	by inserting after the item relating to section 223 2
470	470	the following new item: 3
471	471	‘‘Sec. 224. Coverdell lifelong learning account contributions.’’.
472	472	(f) EFFECTIVEDATE.— 4
473	473	(1) I
474	474	N GENERAL.—Except as otherwise pro-5
475	475	vided in this subsection, the amendments made by 6
476	476	this section shall take effect on January 1, 2026. 7
477	477	(2) E
478	478	LIGIBLE EXPENSES .—The amendments 8
479	479	made by subsection (b) shall apply to distributions 9
480	480	made after December 31, 2025. 10
481	481	(3) C
482	482	ONTRIBUTIONS.—The amendments made 11
483	483	by paragraphs (1)(B) and (2) of subsection (c) shall 12
484	484	apply to contributions made after December 31, 13
485	485	2025. 14
486	486	(4) E
487	487	MPLOYER CONTRIBUTION CREDIT AND 15
488	488	BENEFICIARY DEDUCTIONS .—The amendments 16
489	489	made by subsections (d) and (e) shall apply to tax-17
490	490	able years beginning after December 31, 2025. 18
491	491	Æ
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