About those American Retirement Association-based credentials you’ve been putting off—bipartisan legislation was just introduced that would make it easier to pay for them.
Rep. Abigail Spanberger (D-VA), along with Reps. Fred Upton (R-MI), Dean Phillips (D-MN) and Rob Wittman (R-VA), introduced the Freedom to Invest in Tomorrow’s Workforce Act to allow individuals to use their Section 529 education savings plans to cover the costs of certain workforce training and credentialing programs. A companion bill was introduced in the Senate by Sens. Amy Klobuchar (D-MN) and Mike Braun (R-IN).
In addition to helping to pay for the programs, the bill would allow students to use their 529 funds to pay for associated costs related to certification exams and maintenance of certification credentials. Right now, only colleges, vocational schools, universities or other post-secondary institutions are considered eligible 529 education savings plan expenses, the sponsors note.
“As we watch incredibly specialized trades emerge across our area, I’ll keep working to make these programs more affordable and accessible,” Spanberger said in a statement announcing the legislation.
The legislation would amend current law to allow workers and students to use their 529 plans to pay for training or credentialing programs recognized by a state government or the federal government or an organization widely recognized as providing reputable credentials in the occupation. The bill also maintains the current allowable uses for 529 plan expenses, such as colleges and vocational schools.
“These credentials are highly valuable for individuals seeking to advance in their careers and communicate to the public that certified professionals have met established standards for knowledge, skill, and competency in their fields,” stated a letter of support by the Professional Certification Coalition. “We are proud to support this legislation and look forward to working with Congress to ensure its enactment into law.”
The organization notes that this revised version of the legislation seeks to eliminate any ambiguity about whether expenses associated with high-quality certifications/credential programs that are not required for licensure would be eligible under the bill. As such, new language added to the definition of “qualified higher education expenses” clarifies that programs accredited by the two gold-standard accreditation bodies (NCCA and ANSI) are included as recognized postsecondary credentials, regardless of whether such certification is required for state licensure of an occupation or not.
Additional language in the bill would permit the IRS, in consultation with the Department of Labor, to define the term “recognized postsecondary credential” for purposes of the bill, so that other reputable certification organizations that have not sought accreditation from NCCA or ANSI but are nonetheless are legitimate and important career credentials could be recognized as eligible.
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March 25, 2021 at 07:18PM
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Legislation Would Allow 529 Savings for Professional Certifications - National Association of Plan Advisors
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