The Achieving Choice in Education (ACE) Act, S.3520, would expand the usage of 529 savings accounts to private school and homeschool K-12 expenses. It would also double the allowable account distributions from $10,000 per year to $20,000. Additionally, the ACE Act would allow for gifts to 529 accounts to be tax-exempt, something not currently available for 529 deposits. Ultimately, the bill would allow families to use more of their money on the education expenses of their choosing.
But the Ace Act goes beyond just improving 529 accounts. It would also incentive states to improve their school choice laws. For states with robust school choice laws, the interest on their municipal bonds, often used to fund local projects such as new school buildings, would be 100% tax-exempt. For states with only partial school choice (where 40% of students are eligible for a school choice program), their interest would be 50% tax-exempt. And for those states that don’t offer any kind of school choice to their students, the tax-exempt status of the interest on their bonds would be revoked.
While recognizing that education is, ultimately, a state and local issue, this bill amends current federal law to support and empower parents, which will have a positive impact overall. Broadening the application of 529s and using federal influence to improve school choice laws are both effective methods to do that. CWALAC is proud to endorse a bill that will improve education in America and the lives of students nationwide. Contact your Senators today and ask them to support Sen. Lee’s ACE Act.