Legislation Proposed to Expand 529 Use

Senator Mike Lee (R-UT) has introduced S. 3520, the Achieving Choice in Education Act or the ‘‘ACE Act’’. Key provisions of the Act include:

• Expand the definition of qualified higher education expense to include tuition, curriculum materials, books, online materials, and tutoring in connection with attending an elementary or secondary public, private or religious school
• Increase the limitation on distributions from 529 plans for elementary and secondary school expenses to $20,000 per taxable year, from $10,000
• Allow a gift tax exclusion for contributions up to $20,000 per calendar year to 529 plans

The bill has been referred to the Senate Finance Committee for further consideration.