A bill to amend the Internal Revenue Code of 1986 to increase the limitation on distributions from 529 accounts for qualified higher education expenses.

S. 2206, introduced by Senator Schmitt and referred to the Senate Committee on Finance, would amend the Internal Revenue Code to increase the limit on distributions from 529 college savings accounts that can be used for qualified higher education expenses. Specifically, it would raise the cap from $10,000 to $20,000. The change would apply to taxable years beginning after December 31, 2025. The bill does not change what counts as qualified expenses or the general tax treatment of 529 distributions beyond the specified limit. In practical terms, if enacted, families could withdraw up to $20,000 per year (or per applicable limit under the Code’s rules) from a 529 plan for qualified higher education costs without triggering the special tax treatment that applies to nonqualified withdrawals, subject to the existing definitions of “qualified expenses” under Section 529.