Legislation to expand Education Savings Accounts introduced

Legislation that would expand Coverdell Education Savings Accounts (ESAs) expenses to cover skills training was introduced in the U.S. House on Monday.

U.S. Reps. Brian Fitzpatrick (R-PA), Derek Kilmer (D-WA), Glenn “GT” Thompson (R-PA), and Brad Schneider (D-IL) introduced the Skills Investment Act to help workers access skills training. The legislation would expand ESAs to cover skill training, apprenticeships, and professional development.

“In recent years – even before the pandemic – we’ve seen massive, disruptive economic change. It’s crucial that we don’t leave workers behind,” Kilmer said. “The Skills Investment Act is designed to equip American workers so they can navigate economic change rather than being victimized by it. The bipartisan bill offers workers the opportunity to use lifelong learning accounts to acquire essential skills so they can get new jobs and higher wages while also enabling employers to attract top talent. It’s a win-win and a step toward maintaining America’s competitive edge in the global economy of the 21st century.”

The legislation would allow individual mid-career workers to contribute $4,000 a year into ESAs and would remove the age limits on the accounts. Additionally, employers would receive a 25 percent tax credit for contributing to an employee’s account.

The Skills Investment Act is endorsed by the Association for Career and Technical Education, Advance CTE, National Association of Workforce Boards, National Career Development Association, and National Skills Coalition. Similar legislation was introduced into the U.S. Senate by Sens. Amy Klobuchar (MN) and Mike Braun (IN)

“Now more than ever, innovation is key to moving the American economy forward,” Klobuchar said. “With technological advancements in advanced manufacturing and many other parts of our economy, it is critical that American workers are positioned for success. That means increasing access to the specialized training and education needed to pursue good-paying, high-demand careers. My bipartisan Skills Investment Act will expand tax advantaged savings accounts so workers can build skills for the 21st century economy.”

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