New legislation, the Freedom to Invest in Tomorrow’s Workforce Act, would allow families to use 529 plan funds to pay for programs like postsecondary training and credentialing — including the certified financial planner designation — expanding tax-advantaged resources to those pursuing careers outside of a traditional four-year degree.
The bill, first floated in 2023, was re-introduced in early March by Sens. Amy Klobuchar, D-Minn., and Roger Marshall, R-Kansas, and "will expand Americans’ access to well-paying jobs that require training and credentialing such as licenses and certifications," according to the lawmakers. The bill is co-sponsored by Sens. Peter Welch, D-Vt., and Susan Collins, R-Maine. Rep. Rob Wittman, R-Va., leads companion legislation in the House, having garnered the support of more than 800 trade associations, professional societies and businesses.
The Financial Planning Association joined a coalition in 2023 to push for passage of the bill, which would allow 529 plan funds to be used to take the CFP Board and CPA exams.
The Certified Financial Planner Board of Standards said in a statement that it looks forward to working with Wittman as well as Rep. Steven Horsford, D-Nev., "to push the bicameral bill through Congress."
The new bill is "fantastic news for families, especially those who have been saving in 529 plans for years and have children who have gotten full ride scholarships or have not needed all of their 529 funds," Rachel Gustafson, a planner at Financial Investment Team in Portland, Oregon, told ThinkAdvisor in an email Tuesday.
One of "the great things about 529s is the ability to change the beneficiary to anyone within the family, which means if parents have children who didn’t use all of their 529 plan funds they could potentially use these funds for their own career development later on in life," Gustafson said. "These changes will just further the flexibility that 529s provide. If you pair this with the potential tax credit that many states offer for contributing to 529 plans, this will encourage families to save more within them."
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