Freedom to Invest in Tomorrow’s Workforce Act

Bill Number: H.R. 1151
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-02-07: Referred to the House Committee on Ways and Means.
Last Updated: 2026-07-18T00:03:34Z

AI-Generated Summary

Purpose

The "Freedom to Invest in Tomorrow's Workforce Act" (H.R. 1151) aims to expand the use of 529 savings plans—tax-advantaged accounts originally designed for higher education costs—by including expenses for certain job-related credentials and training programs. This encourages saving for workforce development beyond traditional college degrees.

Key Provisions

Expansion of Qualified Expenses: Amends Section 529 of the Internal Revenue Code to treat "qualified postsecondary credentialing expenses" as eligible for tax-free withdrawals from 529 accounts. These include:
Tuition, fees, books, supplies, and equipment required for enrollment in a recognized postsecondary credential program (similar to costs for college under current law).
Fees for required testing to obtain or maintain a credential.
Fees for continuing education needed to keep a credential valid.
Definition of Recognized Postsecondary Credential Program: Programs qualify if they appear on:
A state list under the Workforce Innovation and Opportunity Act (WIOA, a federal law supporting job training).
The Department of Veterans Affairs' WEAMS Public directory (or successor) for veteran education programs.
Lists for exams administered by reputable organizations that prepare individuals for occupational credentials.
Programs identified by the Secretary of the Treasury (after consulting the Secretary of Labor) as reputable for credential attainment.
Definition of Recognized Postsecondary Credential: Covers:
Industry-recognized employment credentials, including those accredited by bodies like the Institute for Credentialing Excellence or listed in the Department of Defense's Credentialing Opportunities On-Line (COOL) directory.
Certificates from registered apprenticeships certified by the Secretary of Labor under the National Apprenticeship Act.
State or federal occupational/professional licenses (or certifications needed for them).
Credentials as defined in WIOA (broadly, any industry-recognized certificate, license, or registration showing skills for employment).
Effective Date: Applies to distributions (withdrawals) from 529 accounts made after the bill's enactment.

Significant Changes to Existing Law

Currently, 529 plans allow tax-free use only for expenses at eligible educational institutions (like colleges and universities) under Section 529(e)(3). This bill adds a new category for non-degree credentialing, broadening access to vocational, apprenticeship, and licensing programs without requiring congressional approval for each new type.
Shifts focus from degree-based education to skills-based training, integrating references to labor and veterans' programs (e.g., WIOA and VA directories) into tax law for the first time in this context.

Potential Impacts

On Citizens: Individuals and families can use 529 plans for job training costs, potentially increasing savings for career advancement, apprenticeships, or certifications in high-demand fields like trades or technology. This may reduce out-of-pocket expenses for non-traditional education paths.
On Government Agencies: The IRS will handle expanded tax reporting for 529 distributions; the Departments of Treasury, Labor, and Veterans Affairs will collaborate on program recognition, possibly requiring minor administrative updates. No direct fiscal cost to agencies, but broader use could slightly reduce tax revenue from untaxed growth in these accounts.
On International Relations: No apparent impact, as the bill focuses on domestic tax and workforce policies.

Main Stakeholders Affected

Beneficiaries and Families: Designated users of 529 plans (often students or workers) pursuing credentials, who gain more flexible saving options.
Educational and Training Providers: Community colleges, vocational schools, apprenticeship programs, and testing organizations that offer recognized credentials, potentially seeing increased enrollment.
Employers and Industries: Businesses benefiting from a more skilled workforce through accessible training, especially in sectors relying on certifications (e.g., manufacturing, healthcare).
Government Entities: IRS (tax administration), Department of Labor (apprenticeship oversight), Department of Veterans Affairs (veteran programs), and states (via WIOA lists).

Notable Legal, Constitutional, or Political Implications

Legal: Strengthens alignment between tax incentives and federal workforce laws (e.g., WIOA), but relies on administrative discretion (e.g., Secretary identifications), which could lead to future disputes over program eligibility. No challenges to tax code authority under the Internal Revenue Code.
Constitutional: Uncontroversial; Congress has broad power to define tax deductions and credits (Article I, Section 8). Does not infringe on states' rights, as it incorporates existing state WIOA lists.
Political: Bipartisan sponsorship (from both parties) signals broad support for workforce flexibility amid debates on higher education costs and skills gaps. Could influence future tax policy by prioritizing practical training over four-year degrees, potentially reducing reliance on student loans.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Wittman, Robert J. [R-VA-1]

Cosponsors (203)

Rep. Horsford, Steven [D-NV-4], Rep. Hern, Kevin [R-OK-1], Rep. Larson, John B. [D-CT-1], Rep. Finstad, Brad [R-MN-1], Rep. McClellan, Jennifer L. [D-VA-4], Rep. Collins, Mike [R-GA-10], Rep. Panetta, Jimmy [D-CA-19], Rep. Carey, Mike [R-OH-15], Rep. Subramanyam, Suhas [D-VA-10], Rep. Mrvan, Frank J. [D-IN-1], Rep. McCormick, Richard [R-GA-7], Rep. McGuire, John [R-VA-5], Rep. Van Duyne, Beth [R-TX-24], Rep. Houlahan, Chrissy [D-PA-6], Rep. Thompson, Glenn [R-PA-15], Rep. Moore, Blake D. [R-UT-1], Rep. Meuser, Daniel [R-PA-9], Rep. Peters, Scott H. [D-CA-50], Rep. McBath, Lucy [D-GA-6], Rep. Scholten, Hillary J. [D-MI-3], Rep. LaLota, Nick [R-NY-1], Rep. Veasey, Marc A. [D-TX-33], Rep. Schrier, Kim [D-WA-8], Rep. Gooden, Lance [R-TX-5], Rep. Foster, Bill [D-IL-11], Rep. Perez, Marie Gluesenkamp [D-WA-3], Rep. Cline, Ben [R-VA-6], Rep. Steil, Bryan [R-WI-1], Rep. Brownley, Julia [D-CA-26], Rep. Bacon, Don [R-NE-2], Rep. DesJarlais, Scott [R-TN-4], Rep. Hageman, Harriet M. [R-WY-At Large], Rep. Miller, Max L. [R-OH-7], Rep. Bergman, Jack [R-MI-1], Rep. Harder, Josh [D-CA-9], Rep. Morrison, Kelly [D-MN-3], Rep. Lawler, Michael [R-NY-17], Rep. Mace, Nancy [R-SC-1], Rep. Murphy, Gregory F. [R-NC-3], Rep. Bost, Mike [R-IL-12], Rep. Self, Keith [R-TX-3], Rep. Grothman, Glenn [R-WI-6], Rep. Ross, Deborah K. [D-NC-2], Rep. Mann, Tracey [R-KS-1], Rep. Loudermilk, Barry [R-GA-11], Rep. Malliotakis, Nicole [R-NY-11], Rep. Davis, Donald G. [D-NC-1], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Moran, Nathaniel [R-TX-1], Rep. Harris, Andy [R-MD-1] and 153 more

Recent Actions

2025-02-07: Referred to the House Committee on Ways and Means.
2025-02-07: Introduced in House
2025-02-07: Introduced in House

Bill Versions

Freedom to Invest in Tomorrow’s Workforce Act — issued 2025-02-07 — PDF (6 pages)