ACE Act

Senate Bill

S. 311

119th Congress

ACE Act

In Committee

Introduced:Jan 29, 2025

Primary Sponsor

Mike Lee

R - UT

Cosponsors

2

Quick Stats

Policy Area

Taxation

Summary

The ACE Act expands 529 education savings plans to cover more K-12 and homeschool expenses. It doubles the annual limit for these expenses to 20,000 and adds curriculum, tutoring, testing fees, and educational therapies to allowed uses. It also ties state bond tax exemptions to school choice policies.

Latest Action

Read twice and referred to the Committee on Finance.

Introduced1/29/2025

StatusRead twice and referred to the Committee on Finance.

ChamberSenate

Data from Congress.gov

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Vote Prediction

ACE Act

The ACE Act expands 529 education savings plans to cover more K-12 and homeschool expenses. It doubles the annual limit for these expenses to 20,000 and adds curriculum, tutoring, testing fees, and educational therapies to allowed uses. It also ties state bond

Community Breakdown

Pass

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Fail

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0 predictions

The ACE Act expands 529 education savings plans to cover more K-12 and homeschool expenses. It doubles the annual limit for these expenses to 20,000 and adds curriculum, tutoring, testing fees, and educational therapies to allowed uses. It also ties state bond tax exemptions to school choice policies.

Bill Number: 311
Introduced: 1/29/2025
Status: Read twice and referred to the Committee on Finance.
Policy Area: Taxation

Data from Congress.gov

AI-generated summary

Fact Sheet

Title: ACE Act
Bill Number: 311
Sponsor: No sponsor
Status: Read twice and referred to the Committee on Finance.
Introduced: 1/29/2025
Summary: The ACE Act expands 529 education savings plans to cover more K-12 and homeschool expenses. It doubles the annual limit for these expenses to 20,000 and adds curriculum, tutoring, testing fees, and educational therapies to allowed uses. It also ties state bond tax exemptions to school choice policie

Data from Congress.gov

AI Summary

Plain-English explanation of this bill

The ACE Act expands 529 education savings plans to cover more K-12 and homeschool expenses. It doubles the annual limit for these expenses to 20,000 and adds curriculum, tutoring, testing fees, and educational therapies to allowed uses. It also ties state bond tax exemptions to school choice policies.

Last updated: 1/5/2026

Official Summary

Congressional Research Service summary

Achieving Choice in Education Act or the ACE ActThis 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:<ul><li>curriculum,</li><li>books,</li><li>instructional and online educational materials,</li><li>tutoring or educational classes outside the home,</li><li>testing fees,</li><li>fees for dual enrollment in a higher education institution, and</li><li>educational therapies for disabled students.</li></ul>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.

Key Points

Main provisions of the bill

Expands 529 plans to cover homeschool tuition and expenses
Adds curriculum, books, tutoring, and testing fees as eligible expenses
Doubles K-12 expense limit from 10,000 to 20,000 annually
Increases gift tax exclusion by 20,000 for 529 contributions
Ties municipal bond tax breaks to state school choice policies

How This Impacts Americans

Potential effects on citizens and communities

Families using 529 plans would have more flexibility to pay for K-12 and homeschool expenses tax-free. States without school choice programs could lose tax advantages for their municipal bonds, creating pressure to adopt such policies.