ACE Act

Summary

Achieving Choice in Education Act or the ACE Act This bill expands the expenses that may be paid for with tax-free distributions from a qualified tuition program (known as a 529 plan) to include certain elementary, secondary, and homeschool education expenses and makes other changes related to 529 plans. The bill also limits the tax exclusion for interest on state or local bonds. Under current law, 529 plan distributions are excluded from gross income if they are used to pay for qualified higher education expenses, which includes up to $10,000 (per year and per beneficiary) for tuition at an elementary or secondary public, private, or religious school. The bill expands the expenses that may be paid for with tax-free 529 plan distributions to include homeschooling tuition and the following expenses related to elementary, secondary, and homeschool education: curriculum, books, instructional and online educational materials, tutoring or educational classes outside the home, testing fees, fees for dual enrollment in a higher education institution, and educational therapies for disabled students. The bill also increases the amount of tax-free 529 plan distributions that may be used to pay for elementary, secondary, and homeschool education expenses to $20,000. The bill increases the annual gift tax exclusion by $20,000 for contributions made to a 529 plan. (Under current law, up to $19,000 may be excluded from taxable gifts in 2025.) Finally, the bill limits the tax exclusion for interest on state or local bonds to bonds issued by states that meet minimum school choice requirements or political subdivisions of such states.

Summary from the Congressional Research Service. How we handle summaries

Where it stands

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Senate Committee on Finance · U.S. Senate

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Cosponsors

Related bills

• H.R. 750ACE ActRelated bill
• H.R. 939Student Empowerment ActRelated bill
• S. 152Student Empowerment ActRelated bill

As identified by Congress.gov.

Full history

1. Jan 29, 2025

   Introduced

   Introduced in U.S. Senate

   U.S. Senate

2. Jan 29, 2025

   Referred to committee

   Read twice and referred to the Committee on Finance.

3. Jan 29, 2025

   Referred to committee

   Read twice and referred to the Committee on Finance.

Read the record

• Read on Congress.gov (opens in a new tab) The official record on Congress.gov.