The implications of HB 939 are significant for families choosing to enroll their children in various educational settings, including homeschooling. By allowing a wider array of expenses to be covered by 529 accounts, the bill seeks to alleviate some financial burdens associated with education. This change could lead to increased enrollment in alternative education models, as families might feel more financially empowered to pursue diverse educational opportunities beyond traditional public schooling.
Summary
House Bill 939, also known as the Student Empowerment Act, proposes amendments to the Internal Revenue Code of 1986. The bill allows expenses related to kindergarten through grade 12 education to be paid from a 529 savings account. This includes tuition for private, public, or religious schools as well as costs for curriculum materials, books, and educational materials. The legislation aims to broaden the scope of educational expenses that families can cover using these tax-advantaged accounts.
Contention
However, the bill is not without its points of contention. Critics may express concerns regarding the potential for misallocation of tax-advantaged funds, especially concerning accountability for educational effectiveness in settings such as homeschooling or private institutions. Additionally, there may be debates over the fairness of expanding 529 account use in a way that could potentially divert public resources from traditional public education systems, as well as questions about the equity of access for low-income families.
Student Empowerment Act This bill allows tax-exempt distributions from qualified tuition programs (known as 529 plans) to be used for additional educational expenses in connection with enrollment or attendance at an elementary or secondary school. (Under current law, distributions in connection with an elementary or secondary school are limited to tuition for a public, private, or religious school.) The bill allows the distributions to be used for additional educational expenses, including curriculum and curricular materials, books or other instructional materials, online educational materials, tutoring or educational classes outside the home, testing fees, fees for dual enrollment in an institution of higher education, and educational therapies for students with disabilities. Distributions may also be used for tuition and the purposes above in connection with a homeschool (whether treated as a homeschool or a private school under state law).
Children Have Opportunities in Classrooms Everywhere Act This bill allows tax-exempt distributions from qualified tuition programs (known as 529 plans) to be used for additional educational expenses in connection with elementary or secondary school. The bill also allows certain federal funds for elementary and secondary education to follow a student from a low-income household to the public school that the student attends or for tax-exempt educational expenses. Under current law, tax-exempt distributions in connection with elementary or secondary school are limited to tuition for a public, private, or religious school. The bill allows these distributions to be used additionally for curriculum and curricular materials, books or other instructional materials, online educational materials, tutoring or educational classes outside the home, testing fees, fees for dual enrollment in an institution of higher education, and educational therapies for students with disabilities. Distributions may also be used for tuition and the purposes above in connection with a home school (whether treated as a home school or a private school under state law). In addition, the bill directs state educational agencies to allocate grant funds to ensure the funding follows students to their public school or for other tax-exempt educational expenses outlined by the bill. Each state that carries out these allocations must establish a plan that allows the parent of an eligible child to apply for grant funds.
To support the behavioral needs of students and youth, invest in the school-based behavioral health workforce, and ensure access to mental health and substance use disorder benefits.