ACE Act

Summary

Achieving Choice in Education Act or the ACE Act This bill expands the expenses that may be paid for with tax-free distributions from a qualified tuition program (known as a 529 plan) to include certain elementary, secondary, and homeschool education expenses and makes other changes related to 529 plans. The bill also limits the tax exclusion for interest on state or local bonds. Under current law, 529 plan distributions are excluded from gross income if they are used to pay for qualified higher education expenses, which includes up to $10,000 (per year and per beneficiary) for tuition at an elementary or secondary public, private, or religious school. The bill expands the expenses that may be paid for with tax-free 529 plan distributions to include homeschooling tuition and the following expenses related to elementary, secondary, and homeschool education: curriculum, books, instructional and online educational materials, tutoring or educational classes outside the home, testing fees, fees for dual enrollment in a higher education institution, and educational therapies for disabled students. The bill also increases the amount of tax-free 529 plan distributions that may be used to pay for elementary, secondary, and homeschool education expenses to $20,000. The bill increases the annual gift tax exclusion by $20,000 for contributions made to a 529 plan. (Under current law, up to $19,000 may be excluded from taxable gifts in 2025.) Finally, the bill limits the tax exclusion for interest on state or local bonds to bonds issued by states that meet minimum school choice requirements or political subdivisions of such states.

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Timeline

1. 29 January 2025

   Introduced

   Read twice and referred to the Committee on Finance.

   Source: IntroReferral

2. 29 January 2025

   Introduced

   Introduced in Senate

   Source: IntroReferral

Votes

No vote records are attached yet.

Versions

No version snapshots stored. Document URLs remain at the source.

Documents

2 official files

• Introduced in Senate

  Introduced in Senate · EN · 29 January 2025

  DownloadOpen at official source

• Introduced in Senate

  summary · EN · 29 January 2025

  Open at official source

Sponsors

• Sen. Lee, Mike [R-UT] · R · Sponsor
• Sen. Budd, Ted [R-NC] · R · Sponsor
• Sen. Schmitt, Eric [R-MO] · R · Cosponsor
• · ssfi00 · Standing

Related records

• related to → Student Empowerment Act
• related to → ACE Act
• related to ← Student Empowerment Act