H.R.464 - Skills Investment Act of 2025 (119th Congress)
Summary
H.R.464, the Skills Investment Act of 2025, aims to amend the Internal Revenue Code of 1986 by renaming Coverdell education savings accounts to Coverdell lifelong learning accounts and expanding their use. The bill broadens the scope of eligible expenses to include qualified educational or skill development expenses, particularly for individuals over 16, focusing on workforce training and career development. It also modifies age restrictions and contribution rules, allowing for larger account balances and contributions for older beneficiaries, and introduces a credit for employer contributions to these accounts.
Expected Effects
The Act is likely to increase investment in skills development and lifelong learning, especially among older adults and those seeking career changes. By expanding the permissible uses of Coverdell accounts and incentivizing employer contributions, the bill could lead to a more skilled workforce and greater economic mobility.
Potential Benefits
- Expanded access to skills development programs for individuals of all ages.
- Increased employer investment in employee training and education.
- Greater flexibility in using Coverdell accounts for a wider range of educational and skill-building activities.
- Potential for improved workforce readiness and reduced skills gaps.
- Tax advantages for both individuals and employers contributing to lifelong learning accounts.
Potential Disadvantages
- Increased complexity in the tax code due to the new credit and deduction provisions.
- Potential for misuse of funds if the definition of 'qualified educational or skill development expenses' is not strictly enforced.
- The $10,000 account limit after age 30 may not be sufficient for some individuals seeking significant skills upgrades.
- The changes may disproportionately benefit higher-income individuals who are more likely to have Coverdell accounts.
- Possible administrative burden for employers implementing the new contribution credit.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble), as it seeks to promote education and skill development, potentially leading to a more productive and prosperous citizenry. The power to lay and collect taxes (Article I, Section 8) provides the basis for amending the Internal Revenue Code and creating tax credits and deductions related to Coverdell accounts. The expansion of educational opportunities could also be argued to support the goal of securing the Blessings of Liberty by promoting individual self-sufficiency and economic empowerment.
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).