S. 3081 · 117th Congress
Tax Free Education Act of 2021
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Never voted on. It didn't reach a floor vote before the 117th Congress ended, so it expired. A bill has to be introduced again to be considered in a new Congress.
R
PaulSponsorNo cosponsors.
This bill permits tax-free distributions of up to $5,250 from 401(k) plans for qualified higher and elementary and secondary education expenses and penalty-free withdrawals from individual retirement accounts (IRAs) for student loan expenses.
What it does: CRS summary · Introduced in Senate · Oct 27, 2021
Tax Free Education Act of 2021
This bill permits tax-free distributions of up to $5,250 from 401(k) plans for qualified higher and elementary and secondary education expenses and penalty-free withdrawals from individual retirement accounts (IRAs) for student loan expenses.
The bill also excludes from gross income, for income tax purposes, distributions up to $5,250 from employer-sponsored student loan and tuition payment plans. It repeals the limitation on the deduction of interest on student loans and increases from $15,000 to $25,000 (adjusted for inflation) the maximum contribution amounts for certain tax-preferred retirement plans.
The bill allows employees an election to treat contributions to a 401(k) plan as Roth contributions (thus exempting withdrawals from such plans from tax at retirement).
Finally, the bill allows individual taxpayers a new tax deduction for their qualified higher and elementary and secondary education expenses.
Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov
About this bill and sources
Official title: Tax Free Education Act of 2021
Latest action (Oct 27, 2021): Read twice and referred to the Committee on Finance.
Policy area: Taxation · Origin: Senate · Introduced: Oct 27, 2021
Official page on Congress.gov · Bill text (GovInfo) · Status record (XML)
No recorded floor vote found.