Bill would let families spend 529 savings tax-free on trade tools
In committeeH.R. 808Latest action
Sponsor: Marie Gluesenkamp Perez · Representative · WA
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Official title: Fairness for the Trades Act
119th Congress
Topics: Jobs & the economy
Introduced:
Read the official bill on Congress.govIn plain words
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HR 808 would expand 529 tax-free withdrawals to cover tools and equipment needed for skilled trades like plumbing, carpentry, and auto repair.
55-second read · 4 questions answered below
What does this do?
HR 808 would expand the list of approved expenses for 529 savings accounts to include tools and equipment required for skilled trade work. The equipment must be the kind that can be depreciated over time, meaning physical gear and tools rather than structures or buildings. Covered trades are defined by specific industry codes and include fields such as construction, plumbing, electrical work, roofing, HVAC, masonry, landscaping, auto repair, logging, and fishing.
Who does it affect?
This bill most directly affects people with 529 accounts who are entering or working in a skilled trade, as well as parents saving for children who may pursue a trade career instead of a traditional college path. It also affects anyone who believed 529 accounts previously favored college-bound students over those choosing trades.
Why does it matter?
Under current law, 529 withdrawals are tax-free only for approved education expenses such as tuition and school fees, which has limited the accounts' usefulness for people entering skilled trades. Expanding eligible expenses to include trade tools would change how 529 funds can be used at the point of career entry or during trade work.
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Where does it stand?
- IntroducedJan 28, 2025
- House committeeYou are here · Jan 28, 2025
- House vote
- Senate
- The president's desk
Right now: a House committee is reviewing it. If the Senate changes it, it goes back to the House before reaching the president.
Latest action: — Referred to the House Committee on Ways and Means.