Summary#
This bill creates a new type of state-run tax-exempt savings account called a "Jumpstart Program" and adds section 529B to the Internal Revenue Code. States (or state agencies) can set up accounts that people may contribute to for a named beneficiary. The accounts are generally exempt from federal income taxation under the subtitle but are subject to the unrelated business income tax in section 511. The program must follow rules similar to several existing section 529 requirements. The bill requires program managers to report contributions and distributions to the IRS and to account beneficiaries. It also allows rollovers from existing 529 tuition accounts into a Jumpstart account for the same beneficiary or a family member. The changes apply to taxable years beginning after December 31, 2025.
What it means for you#
- A state can offer a Jumpstart account to help save for apprenticeship and trade training costs for a named beneficiary.
- Families and others may contribute to those accounts for a beneficiary.
- Money in the account can be used for specific trade-related expenses (see Expenses).
- Owners or managers of the program must send reports to the IRS and to beneficiaries about contributions and distributions.
- Owners of existing 529 college savings accounts may roll funds into a Jumpstart account for the beneficiary or a family member.
Expenses#
The bill defines the qualified occupation, profession, or trade expenses that Jumpstart account money may pay for. Those listed in the bill are:
- Expenses to complete an apprenticeship program registered and certified with the Department of Labor (National Apprenticeship Act).
- Tuition, fees, books, supplies, and equipment for enrollment in an associate degree or certification program at a community or technical college.
- Fees for required certification or licensure to practice a trade or occupation.
- Costs to purchase tools and equipment used in the normal course of practicing a trade or occupation.
- Costs necessary to establish and operate a business in the State where the beneficiary will practice, when those costs are paid exclusively to establish and operate that business.
No publicly available information on estimated federal budget costs or other fiscal effects is included in the bill text and metadata provided.
Proponents' View#
No publicly available information.
Opponents' View#
No publicly available information.