HR-1151-119
Referred to the House Committee on Ways and Means.
Sponsored by Robert Wittman (R-VA)
What it does
This bill would amend the Internal Revenue Code to allow tax-advantaged 529 savings account funds to be used for postsecondary credentialing expenses — such as tuition, fees, books, supplies, testing fees, and continuing education costs — required to obtain or maintain a recognized professional credential, license, or apprenticeship certificate. Qualifying programs would need to meet at least one of several standards, including listing on a state workforce program directory, inclusion in the VA's WEAMS directory, recognition by a reputable credentialing organization, or designation by the Treasury Secretary in consultation with the Secretary of Labor.
Who benefits
Families and individuals who have 529 accounts and want to use them for vocational or professional credentials rather than traditional college. Workers seeking industry certifications (e.g., IT, healthcare, skilled trades), apprenticeship completers, and those pursuing state-issued occupational licenses. Lower- and middle-income workers who may benefit more from credentials than four-year degrees. Employers in skilled-trade and technical sectors who may see a larger credentialed workforce. Credentialing organizations and vocational training providers who may see increased enrollment. Veterans, whose credential programs are already listed in the VA's WEAMS directory and would qualify under the bill.
Who is hurt
Traditional four-year colleges and universities may face indirect competitive pressure as 529 funds become usable for shorter, lower-cost credential programs. Federal and state tax revenues would decrease modestly as more 529 withdrawals qualify for tax-free treatment. Unbanked or lower-income families who do not have 529 accounts would not benefit, potentially widening the gap between those who can and cannot afford to save in tax-advantaged accounts. Credential programs that do not meet any of the bill's qualifying standards would be excluded, potentially disadvantaging newer or niche programs.
Supporters argue
Supporters argue that the current 529 system unfairly favors traditional four-year college paths, even though millions of well-paying jobs require industry certifications, apprenticeships, or occupational licenses rather than degrees. They contend that expanding eligible expenses would give working families greater flexibility to use savings they have already set aside, and that credentialed workers in fields like healthcare, construction, and information technology fill critical labor shortages. The bill's bipartisan sponsorship — including members from both parties across multiple states — reflects broad agreement that workforce development and tax equity support this expansion.
Opponents argue
Opponents argue that 529 accounts disproportionately benefit higher-income families who have the financial capacity to save in tax-advantaged accounts in the first place, meaning this expansion would primarily deliver tax benefits to those who need them least. They contend that the bill's multiple qualifying pathways and reliance on agency discretion — including a broad catch-all allowing the Treasury Secretary to designate programs — could allow low-quality or unaccountable credential programs to access tax benefits without sufficient consumer protection standards. Critics may also argue that the revenue cost, while modest, could be better directed toward direct grants or subsidies for workers who cannot afford to save at all.
Constitutional context
This bill modifies an existing tax provision under Congress's broad taxing and spending authority (Art. I, §8, cl. 1). No significant constitutional tension is present — the bill adjusts the definition of qualified expenses within an established tax-advantaged savings framework and does not raise issues of direct tax apportionment, realization, or the tax-vs-penalty distinction addressed in NFIB v. Sebelius (2012).
Checks and balances
Congress expands the scope of a tax benefit; the Treasury Secretary (executive branch) retains discretionary authority to designate additional qualifying programs in consultation with the Secretary of Labor, subject to congressional oversight and potential judicial review of agency action post-Loper Bright (2024).
Historical precedent
The SECURE 2.0 Act of 2022 previously expanded 529 account uses to include apprenticeship programs and limited student loan repayments, establishing a recent precedent for broadening qualified 529 expenses beyond traditional higher education.