Gardner Talks Childcare Costs, Education, Tax Adavantages & Employer Contributions
WASHINGTON, DC – Senator Cory Gardner (R-CO) introduced the 529 Expansion and Modernization Act on Tuesday. Senator Gardner’s legislation expands the tax free educations savings account, called 529 savings plans, to be able to be used for early childhood expenses and alternative education opportunities like trade schools and apprenticeship programs. Currently, 529 savings plans are limited to educational costs for post-secondary education or private, public or religious k-12 educational expenses.
“This bill simultaneously addresses two separate issues that I regularly hear about all across Colorado,” said Gardner. “First, parents throughout the state are struggling to find affordable early childhood education for their young children. While we know that those early years are critical for educational development, we don’t do enough to help parents make the most of that important time. As a result, parents are often overwhelmed by the cost of early education programs or are pulled out of the workforce to care for their young children. This bill will help parents shoulder that burden by opening up these accounts for early childhood education programs and would enable employers to start making tax-advantaged contributions into their employees’ accounts.”
“On behalf of not-for-profit ‘Early Learning Ventures’ foundation, I am very pleased that Senator Gardner is moving forward with his effort to provide working families with a new financial tool to help defray the high costs of quality early child care and education,” said David Merage, Merage Foundation. “This new policy effort, while a first step and one I hope in the coming years we can build upon, will allow parents, grandparents, and all relatives help young families financially prepare for the high costs of quality early childhood education and care. Importantly as well, it will allow an employer to utilize this new tool and make a contribution on behalf of the child care needs of the employee.”
“Business leaders in virtually every community I visit talk about the shortage of skilled labor,” continued Gardner. “Employers want to pay good salaries but can’t find the skilled laborers they need. This bill enables workers to obtain those skills by putting apprenticeship, CTE, and similar programs on the same footing as college education for 529s. Whether used by a student seeking an alternative to a four-year degree or by a current worker looking to add to his or her skillset, opening 529s to a broader range of educational opportunities will help our workers adjust to our economy’s changing demands.”
What are 529 savings plans?
529 savings plans are tax free savings accounts used for educational expenses such as tuition for private, public and religious institutions starting in elementary school and continuing throughout high school. The 529 savings plan is applicable to all programs administered by the U.S. Department of Education, this includes attendance at any college or university, as well as any other form of post-secondary education.
How does this legislation change them?
The 529 Expansion and Modernization Act will also make childhood education, career and technical education, targeted training and registered apprenticeships as eligible for the savings plans. It will also open up tax-advantaged employer contributions so that employers can help shoulder the burden their employees face with early childhood early and other educational opportunities.
Bill text available here.
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