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Lifelong Learning Accounts: New Rules and Tax Benefits

This act modifies education savings accounts, transforming them into lifelong learning accounts. Citizens can now use these funds for a broader range of training and skill development, and benefit from new tax credits for employers and deductions for beneficiaries. The changes aim to support continuous education and professional development.
Key points
Coverdell Education Savings Accounts are renamed Coverdell Lifelong Learning Accounts, expanding their use.
Funds can now be used for vocational training, skill development courses, transportation for learning, certification tests, computer equipment, and internet access.
The age limit for contributions is raised to 70, and individuals over 30 can contribute up to $4,000 annually, with a $10,000 account balance limit after age 30.
Employers can receive a 25% tax credit for contributions to employee accounts, and beneficiaries aged 18 or older can deduct contributions from their taxes.
The penalty for improper use of funds is increased from 10% to 20% of the distribution amount if not used for qualified expenses.
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Additional Information
Print number: 117_HR_1242
Sponsor: Rep. Kilmer, Derek [D-WA-6]
Process start date: 2021-02-23
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Skills Investment Act of 2021

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_HR_1242.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2021-02-23.

What are the main provisions?

Key points include:

  • Coverdell Education Savings Accounts are renamed Coverdell Lifelong Learning Accounts, expanding their use.
  • Funds can now be used for vocational training, skill development courses, transportation for learning, certification tests, computer equipment, and internet access.
  • The age limit for contributions is raised to 70, and individuals over 30 can contribute up to $4,000 annually, with a $10,000 account balance limit after age 30.
  • Employers can receive a 25% tax credit for contributions to employee accounts, and beneficiaries aged 18 or older can deduct contributions from their taxes.
  • The penalty for improper use of funds is increased from 10% to 20% of the distribution amount if not used for qualified expenses.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Kilmer, Derek [D-WA-6].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-27.

CATEGORIES

Education Taxes Labor