Freedom to Invest in Tomorrow's Workforce Act - S. 722, H.R. 1477 - Articles

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02Jan

Freedom to Invest in Tomorrow's Workforce Act - S. 722, H.R. 1477

Sens. Amy Klobuchar (D-MN) and Mike Braun (R-IN) and Reps. Rob Wittman (R-VA-01) and Abigail Spanberger (D-VA-07) introduced the Freedom to Invest in Tomorrow’s Workforce Act (S. 722, H.R. 1477), legislation that would permit certain expenses associated with obtaining or maintaining postsecondary credentials (such as licenses, certifications, or certificates) to be treated as qualified higher education expenses for purposes of 529 tax savings accounts. The bills would transform college savings plans into career savings plans.

A 529 plan is a state-sponsored education savings vehicle that is exempt from federal taxes if funds are used to pay for qualified education expenses. These include college, graduate or professional degrees; programs from Title IV-accredited institutions; registered apprenticeships; up to $10,000/year in K-12 tuition; and certain student loan repayments. There is approximately $450 billion nationwide in 529 accounts (according to the College Savings Plan Network).

Under the Act, workers and families could use 529 plans to help cover: Credential program tuition, including prep courses; Testing fees, including practice exams; Required books and equipment; Continuing education and credential renewal; and Other charges required to obtain and maintain a postsecondary credential.

America’s workforce is comprised mostly of middle-skill jobs that require more than a high school education but not a bachelor’s degree, according to the National Skills Coalition. A differentiator amid the 21st century workforce is postsecondary credentialing—for workers with or without a two- or four-year degree. That applies to the insights industry, too.

There are currently 101 cosponsors of the Act in the House (64 Republicans, 37 Democrats) and 14 in the Senate (7 Republicans, 7 Democrats).

Provisions of the Freedom to Invest in Tomorrow’s Workforce Act

S. 722 and H.R. 1477 would amend Section 529(e)(3) of the Internal Revenue Code, to add a new subsection (C) “CERTAIN CAREER TRAINING AND CREDENTIALING EXPENSES” with the following new definitions:

(i) “Qualified higher education expenses” means:

  1. “tuition, fees, books, supplies, and equipment required for the enrollment or attendance of an individual in a recognized postsecondary credential program, or any other expense incurred in connection with enrollment in or attendance at a recognized postsecondary credential program if such expense would, if incurred in connection with enrollment or attendance at an eligible educational institution, be covered under subparagraph (A),” and
  2. “fees required to obtain or maintain a recognized postsecondary credential, including testing and other fees required by the organization issuing the recognized postsecondary credential as a condition of maintaining or obtaining the credential.”

(ii) “Recognized postsecondary credential program” means “a program to obtain a recognized postsecondary credential if such program is included on a list prepared under section 122(d) of the Workforce Innovation and Opportunity Act or meets the training or educational prerequisites to qualify an individual to take an examination developed or administered by an organization widely recognized as providing reputable credentials in the occupation, where such examination is required to obtain or maintain a recognized postsecondary credential.”

(iii) “Recognized postsecondary credential” means:

  1. “a recognized postsecondary credential, as such term is defined in section 3(52) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102) (but an industry-recognized credential shall be for a program for which a provider is eligible under section 122 of that Act (29 U.S.C. 3152)), including a credential from a certificate or certification program that is accredited by the National Commission for Certifying Agencies or the American National Standards Institute,” or
  2. “any other postsecondary credential recognized for purposes of this subparagraph under regulations or guidance provided by the Secretary, in consultation with the Secretary of Labor.”

If passed into law, the Act would “apply to expenses paid or incurred in taxable years beginning after the date of the enactment of this Act.”

Eligible credentialing and training

Credentialing and training eligibility under the Act would include:

  • Programs included in any state Workforce Innovation and Opportunity Act (WIOA) database and those considered “recognized postsecondary credentials,” as defined under WIOA statute—section 3(52);
  • Programs accredited by the American National Standards Institute (ANSI); and
  • Programs accredited by the National Commission of Certifying Agencies (NCCA).

The Internal Revenue Service (IRS) will conduct guidance or rulemaking, in consultation with the Department of Labor (DOL), to determine how to include legitimate, deserving programs that do not meet the above criteria.

IA’s position on the Freedom to Invest in Tomorrow’s Workforce Act (S. 722, H.R. 1477)

Currently, 529 accounts can be used for all the Masters or postgraduate programs in insights and analytics.

However, if approved and passed into law, the Freedom to Invest in Tomorrow’s Workforce Act would allow for funds invested in 529 accounts to be used for current or future insights professionals pursuing postsecondary training and certification in our industry, such as with Burke Institute, Cambiar, Market Research Institute International (MRII), Research Rockstar (including the Insights Professional Certificate (IPC) Specialty certificates), and RIVA.

IA joined the Tomorrow’s Workforce Coalition (headed by the American Society of Associations Executives (ASAE)) with more than 760 other trade associations, professional societies and businesses, in support of this legislation. IA also signed onto the Tomorrow’s Workforce Coalition letter in support of the Act, sent on September 27, 2023.

IA has a 1-page position paper on the bill also.

As described by the coalition, “The bill would provide valuable tax-advantaged resources for families, students and workers—with or without a college degree—who pursue career growth, mid-career changes or pathways that diverge from a typical academic route.”

A coalition member testified at a hearing in the House Ways & Means Committee on the bill.

The Insights Association endorsed the Freedom to Invest in Tomorrow’s Workforce Act (S. 722, H.R. 1477) to help invest in insights professionals, reinforce our commitment to professional development and advocate for a stronger insights industry workforce.

About the Author

Howard Fienberg

Howard Fienberg

Based in Washington, DC, Howard is the Insights Association's lobbyist for the marketing research and data analytics industry, focusing primarily on consumer privacy and data security, the Telephone Consumer Protection Act (TCPA), tort reform, and the funding and integrity of the decennial Census and the American Community Survey (ACS). Howard has more than two decades of public policy experience. Before the Insights Association, he worked in Congress as senior legislative staffer for then-Representatives Christopher Cox (CA-48) and Cliff Stearns (FL-06). He also served more than four years with a science policy think tank, working to improve the understanding of scientific and social research and methodology among journalists and policymakers. Howard is also co-director of The Census Project, a 900+ member coalition in support of a fair and accurate Census and ACS. He has also served previously on the Board of Directors for the National Institute for Lobbying and Ethics and and the Association of Government Relations Professionals. Howard has an MA International Relations from the University of Essex in England and a BA Honors Political Studies from Trent University in Canada, and has obtained the Certified Association Executive (CAE), Professional Lobbying Certificate (PLC) and the Public Policy Certificate (PPC). When not running advocacy for the Insights Association, Howard enjoys hockey, NFL football, sci-fi and horror movies, playing with his dog, and spending time with family and friends.

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