Proposal Would Increase 529 Amounts Available for K-12 Expenses

Senator John Kennedy (R-LA) has introduced S. 4265, the Inflation-Adjusted Education Investment Act. The proposal would increase the current limit on 529 plan distributions from $10,000 to $12,000. The bill would also make the new cap adjustable for inflation beginning in 2023.

The 2017 Tax Cuts and Jobs Act permits parents to withdraw up to $10,000 per beneficiary each year to use for qualifying K-12 expenses. Those expenses include private and religious schooling. Many parents turned to these options as alternatives to public schools in light of shutdowns during the pandemic.