Bill would let families spend 529 savings tax-free on trade tools

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.

Where does it stand?