H.R.3574 - To amend the Internal Revenue Code of 1986 to permit qualified distributions from section 529 plans for certain transportation and parking expenses. (119th Congress)
Summary
H.R.3574 proposes amending the Internal Revenue Code of 1986 to allow qualified distributions from 529 plans for certain transportation and parking expenses related to attending eligible educational institutions and apprenticeship programs. The bill specifies that these expenses must be reasonable and not exceed the transportation allowance included in the cost of attendance as determined by the educational institution. The amendment aims to make 529 plans more flexible and useful for students and apprentices.
Expected Effects
If enacted, H.R.3574 will expand the permissible uses of 529 plan funds. This would allow families to use these funds for transportation and parking expenses related to education. The change could incentivize more people to save for education through 529 plans.
Potential Benefits
- Increased flexibility in using 529 plan funds.
- Potential reduction in the financial burden of education by covering transportation costs.
- Encouragement of participation in apprenticeship programs by covering transportation expenses.
- Simplification of financial planning for education expenses.
- Potential increase in enrollment in higher education and apprenticeship programs.
Potential Disadvantages
- Potential for misuse of funds if transportation expenses are not properly monitored.
- Possible reduction in overall savings for tuition and other core educational expenses if funds are diverted to transportation.
- Increased complexity in administering 529 plans.
- Minimal impact on families who do not utilize 529 plans.
- Potential for increased tax avoidance if not carefully regulated.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble). Congress has the power to tax and spend for the general welfare, and this bill aims to support education by making 529 plans more useful. The bill does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).