Skills Investment Act of 2025

Expanded Use of Funds: The bill expands what the money can be used for, allowing for "qualified educational or skill development expenses" such as training services, career and technical education, career services, youth activities, and adult education and literacy activities. It also allows for expenses related to transportation, testing, and certain computer-related equipment or services (Section 2. (b)).

Increased Contribution Limits for Adults: For beneficiaries who have attained age 30, the annual contribution limit is increased from $2,000 to $4,000 (Section 2. (c)(3)(A)).

Extended Age for Contributions: The age limit for making contributions to these accounts is increased from age 18 to age 70 (Section 2. (c)(2)).

Employer Tax Credits: Employers can receive a tax credit equal to 25 percent of nonelective contributions made to a Coverdell lifelong learning account for an employee (Section 2. (d)(1)).

Tax Deductions for Beneficiaries: Individuals who are designated beneficiaries of these accounts and are at least 18 years old may be allowed a deduction for the amount of contributions made to the account (Section 2. (e)(1)).

Account Balance Restrictions: For beneficiaries who have attained age 30, the bill establishes a limit where a contribution cannot result in the account balance exceeding $10,000 (Section 2. (c)(1)(A)).

Changes to Beneficiary Rules: After the age of 30, there are specific restrictions placed on changing the beneficiary of an account (Section 2. (c)(4)).

Increased Tax Rate on Certain Distributions: The additional tax rate for certain distributions is increased from 10 percent to 20 percent (Section 2. (e)(2)(A)(i)).