SB152 amends the Internal Revenue Code to allow distributions from 529 plans to cover elementary and secondary education costs. Specifically, it redefines qualified higher education expenses to include a broad set of K-12 items, ranging from tuition to curricular materials, books, online materials, tutoring outside the home, and related services.
It also explicitly covers homeschool expenses under the same umbrella and sets conditions for tutoring and exam-related costs. The amendment applies to distributions made after enactment, expanding the use of 529 funds for families with elementary and secondary students.
At a Glance
What It Does
The bill expands 529 qualified expenses to include K-12 tuition, curriculum, materials, online resources, tutoring, standardized tests, dual enrollment, and therapies, with homeschool costs included.
Who It Affects
Families saving for K-12 education, including homeschoolers, students in public, private, or religious schools, and the service providers they use (tutors, test-prep, dual enrollment programs).
Why It Matters
It broadens tax-advantaged savings opportunities for K-12 education, potentially shifting funding decisions and creating new compliance considerations for plan administrators and states.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The act changes how 529 accounts can be used by American families. By redefining what counts as a qualified expense, it allows funds from 529 plans to cover a wider range of K-12 education costs.
This includes tuition and a wide list of educational materials and services that families might incur for students in elementary and secondary settings, whether they attend public, private, religious, or homeschool arrangements. The provision also clarifies that homeschool-related expenses are eligible, bringing homeschool funding into the tax-advantaged framework previously focused on higher education.
The list of eligible expenditures includes tutoring outside the home (under specific conditions about the tutor’s qualifications), admissions testing, dual enrollment, and educational therapies for students with disabilities. The changes become effective for distributions made after enactment, enabling earlier use of these funds for qualifying K-12 needs.
The overall effect is to broaden savings flexibility for families and service providers while expanding the scope of what counts as a qualifying education expense under Section 529.
The Five Things You Need to Know
The bill expands the class of 529 expenses to include K-12 costs.
The enumerated items (A-H) cover tuition, curricula, books, online materials, and tutoring.
Homeschool expenses are explicitly made eligible.
Tutoring outside the home must meet specific qualification criteria.
The amendment applies to distributions after enactment.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short Title
Designates the act as the Student Empowerment Act. It establishes the naming for the statutory changes that follow and signals the scope of the policy change toward K-12 education funding through 529 plans.
529 account funding for homeschool and additional elementary and secondary expenses
The core amendment rewrites 529(c)(7) to treat a broad set of K-12 expenses as qualified higher education expenses. It lists items A through H, including tuition, curriculum and curricular materials, books, online materials, tutoring outside the home (with qualifications for the tutor’s credentials), fees for standardized tests and college admissions exams, dual enrollment fees, and educational therapies for students with disabilities. It also clarifies that these expenses apply in connection with homeschool or private schooling, ensuring homeschool costs are eligible under the same framework.
Effective date
The amendment applies to distributions made after the date of enactment, ensuring immediate applicability for qualifying expenditures once the law takes effect.
This bill is one of many.
Codify tracks hundreds of bills on Finance across all five countries.
Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Parents and guardians who use 529 funds to cover K-12 costs, including tuition and materials, reducing out-of-pocket spending.
- Homeschool families, who gain access to tax-advantaged funding for a broader range of homeschool-related expenses.
- Students in private or religious schools who can rely on 529 funds for tuition and instructional materials.
- Educational service providers (tutors, tutoring facilities, test-prep and dual enrollment programs) that receive payments funded from 529 accounts, expanding their potential customer base.
Who Bears the Cost
- Foregone federal revenue from expanded tax-advantaged use of 529 funds.
- 529 plan administrators and financial institutions that must adjust compliance, reporting, and systems to accommodate the expanded eligibility.
- State administrations and taxpayers that may face administrative costs and potential revenue effects from broadened state tax benefits tied to 529 plans.
- Some educational providers and institutions may bear higher compliance costs to ensure funds are used for eligible expenses.
Key Issues
The Core Tension
The central dilemma is balancing broader access to tax-advantaged funding for a wide range of K-12 education expenses against the risk of reduced oversight, increased potential for misuse, and revenue implications for both the federal government and state programs.
The expansion introduces policy tensions around the scope of federal tax expenditures, the equity of benefits across different family types, and the risk of funds flowing toward private or religious schooling. While broadening access to tax-advantaged savings for K-12 aims to give families more flexible funding options, it also raises questions about how funds are monitored, what constitutes an eligible expense, and how to prevent misuse.
The legislation relies on a definition of eligible costs that requires careful implementation by plan administrators, custodians, and issuing agencies, and it may require states to adjust reporting and compliance regimes. Stakeholders will need to watch for potential leakage into non-qualifying activities and the administrative burden placed on 529 programs to enforce the rules consistently across diverse educational settings.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.