H.R. 3574 would expand what families can use 529 education savings plans to pay for by adding transportation and parking expenses to the list of qualified expenses. Currently, 529 plans allow tax-free withdrawals for tuition, fees, room and board, and books, but this bill would permit distributions for transportation costs up to the amount that the student's school includes in its official cost of attendance calculation. The change would apply to both traditional college students and those participating in apprenticeship programs. The bill takes effect immediately upon passage and would apply to any distributions made after the law is enacted. This change would give families slightly more flexibility in using their 529 savings without triggering tax penalties.
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