Bill · S. 311· Senate(119-S-311)
ACE Act
- Introduced
- 1/29/2025
- Last activity
- 1/29/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Mike Lee
- Cosponsors
- - 2 - 0
- Introduced
- In Committee
What this bill would do
The ACE Act aims to amend the Internal Revenue Code of 1986 to provide incentives for education. It expands the definition of qualified higher education expenses under Section 529 to include various elementary and secondary school costs, including those for homeschoolers. The bill increases the limitation on distributions from 529 plans for elementary and secondary expenses. It also adds a gift tax exclusion for contributions made to 529 plans. Finally, the legislation restricts the tax-exempt status of certain State or local bonds based on whether a State implements specific school choice laws.
Yes· 3 of 6
Would people with disabilities be better off under this?+7
The bill allows 529 funds to be used for essential educational therapies like occupational and speech-language therapy.
Would children be better off under this?+6
The bill expands the types of educational expenses, including homeschooling and therapies, that can be covered by 529 plans.
Does this expand the rights of people with disabilities?+6
The bill expands the use of 529 funds to cover educational therapies for students with disabilities.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Expanded use of 529 funds: Students can use these funds for a wide range of elementary and secondary expenses, such as tuition, curriculum, books, online materials, tutoring, and examination fees (Section 2(a)).
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Support for students with disabilities: The bill allows for the use of funds for educational therapies like occupational, behavioral, physical, and speech-language therapies provided by licensed practitioners (Section 2(a)).
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Inclusion of homeschoolers: The expanded benefits for elementary and secondary expenses explicitly include expenses related to a homeschool (Section 2(a)).
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Increased distribution limits: The cap on distributions from 529 plans for elementary and secondary school expenses is increased from $10,000 to $20,000 (Section 3).
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Gift tax benefits: Contributions to 529 plans can be used to increase the dollar amount in effect for gifts made during a calendar year (Section 4).
Potential Negative Impacts for People
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Restrictions on tax-exempt bonds: State or local bonds may lose their tax-exempt status if they are not issued by a "minimum school choice State" or a political subdivision of one (Section 5(a)(1)).
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Reduced tax exemption for certain states: States that meet some but not all requirements for a "minimum school choice State" may have their bond interest tax exemption reduced to 50 percent (Section 5(a)(2)(A)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For People With Disabilities+7Good For Children+6Good For Middle Class Households+4
- Social Issues And Justice
- Improves Disability Rights+6
- Economy And Finance
- Reduces Middle Class Taxes+5
- Education And Technology
- Improves College Affordability+3
- 2/12/2025
- 1 Cosponsor added.
- 1/29/2025
- Read twice and referred to the Committee on Finance.
- 1 Cosponsor added.
- Introduced in Senate
3 bills Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Ted BuddRepublican · North Carolina
Eric SchmittRepublican · Missouri