Expanded Tax Exemption for Higher Ed Expenses Stumbles in the Senate

A plan that would expand tax exemptions to include savings designated for the education needed to obtain a postsecondary credential or a professional license did not make it into the final version of the 2019 Defense, Labor, and Health and Human Services spending bill passed by the Senate on Aug. 23.

The tax-focused measure was added to the bill in an amendment offered by Sen. Amy Klobuchar (D-MN). The amendment would have updated Section 529 of the Internal Revenue Code to treat these expenses as qualified higher education expenses for a 529 Plan. A 529 Plan is a tax-advantaged savings plan designed to encourage savings for future education costs.

The American Counseling Association Government Affairs department is working to make education savings plans more beneficial to counselors.

The Amendment Process
Only 57 amendments were accepted or approved on this legislation, out of a total of 318 amendments offered. The chances of adding an amendment changing the tax code to a spending bill were always slim because tax committee members usually object to any such loss of jurisdiction. They prefer to see tax provisions in bills that pass through their committee, the Finance Committee. 

The Next Step
This amendment will have a better opportunity on a package of tax provisions, or possibly on the next Higher Education Authorization bill.

The American Counseling Association Government Affairs team will work to build support on one of these bills. We also will be looking for any opportunity to include the plan when the House takes up its education spending bill, possibly this month.

ACA will notify members through the VoterVoice action alert system when their support is needed to help gain passage of a measure that would expand 529 savings plans to include expenses related to postsecondary credentials or professional licenses.