Fairness for the Trades Act
Fairness for the Trades Act would expand how 529 college savings accounts can be used. It adds a new category of qualified higher education expenses called “Qualified Business Trade Expenses.” Under the bill, funds in a 529 account could cover (or reimburse) certain equipment purchases that a beneficiary buys for use in a qualified trade field. The property must be tangible, depreciable (not a building), and used in a field described by a specified list of NAICS codes that cover various trades and occupations. The intended effect is to make 529 funds more usable for individuals pursuing vocational and trades training, not just traditional college education. The changes apply to expenses paid in taxable years beginning after the bill’s enactment.
Key Points
- 1Creates a new category: “Qualified Business Trade Expenses” as part of qualified higher education expenses in 529 accounts.
- 2Defines the core concept: “qualified post business trade expenses” are amounts paid by the designated beneficiary for specified business property used by the beneficiary in a qualified trade field.
- 3Defines “specified business property”: tangible property (other than buildings) that is depreciable for tax purposes.
- 4Defines “qualified trade field” via a long list of NAICS codes, covering a broad set of trades and related industries (e.g., construction, maintenance, repair services, equipment-oriented fields, etc.).
- 5Effective date: the amended rules apply to expenses paid in taxable years beginning after enactment.