Expanded Education Savings Accounts In Tax Reform ‘A Big Win For Families’

‘The First Legislative Expansion Of Nationwide Private School Choice In 20 Years,’ ‘Truly A Game Changer,’ ‘A Positive Change’

SEN. TED CRUZ (R-TX): “Congress recently passed a historic, pro-growth tax-reform bill that includes … my Student Opportunity Amendment to expand the hugely popular 529 College Savings Plans to include the opportunity to save and pay for public and private K-12 education. Nearly 41,000 Texas families use 529 accounts to save for the college educations of their children and grandchildren in a tax-advantaged fashion. Anyone can contribute to a 529 account with after-tax money, which then grows tax-free and can be spent without paying taxes on the earnings. By expanding these accounts to include public and private K-12 education, my amendment gives parents in Texas and across the country a powerful tool to help them provide for their children's educational needs, regardless of income or ZIP code. This major reform — the most significant school-choice legislation in history — passed the Senate 50-50, with the vice president casting the tie-breaking vote.” (Sen. Cruz, Op-Ed, Star-Telegram, 12/28/2017)

• “…the United States Senate passed their version of the Tax Cuts and Jobs Act, better known as tax reform. Only one additive floor amendment made it into the bill. Senator Ted Cruz (R-Texas) offered an amendment to make 529 education savings accounts even more useful than today. 529 accounts up until now have been used exclusively for college tuition and expenses. The Cruz amendment expands the use of 529 dollars for two additional purposes--tuition for students in K-12 private and parochial schools, and costs related to homeschooling a child. Up to $10,000 per year per child can be distributed for these purposes. In a dramatic turn, the Cruz amendment was stuck at 50-50, requiring Vice President Mike Pence to hurry to the chamber and break the tie. 529 plans can be thought of as the rough equivalent of Roth IRAs for education--money goes in after tax, but then grows tax free. Distributions are tax exempt if used for qualified education expenses.” (“Ted Cruz's 529 Education Savings Amendment To Tax Reform Is A Big Win For Families,” Forbes, 12/4/2017)

COMMITTEE ON DOMESTIC JUSTICE AND HUMAN DEVELOPMENT: “Education: 529 Savings Plans – Both chambers also extend the benefits of 529 plans to K-12 education. This is very a positive change. The House bill also extends the plan to the child in utero, and allows up to an additional $10,000 to be set aside for school expenses.” (Committee On Domestic Justice And Human Development, Letter To U.S. Senate, 12/6/2017)

More Than 70 Organizations To Sen. Cruz: “Thank you for your leadership in including in the Tax Cuts and Jobs Act a provision to expand 529 college savings accounts to include K-12 tuition.  More than 70 organizations represented on this letter reflect the broad and deep support for expanding American families’ access to education options through 529 savings plans. …this will mark the first legislative expansion of nationwide private school choice in 20 years.” (Coalition Letter To Sen. Cruz, 12/8/2017)

DREW WHITE, Texas Public Policy Foundation: “Expanding 529s to include K-12 expenses would be one of the most consequential policy improvements for middle and lower-income households in a generation. While the overall tax bill would provide some degree of tax relief for Americans, the expansion of 529s is truly a game changer.” (Drew White, Op-Ed, The Hill, 12/11/2017)