Rep. Breen Files Legislation Allowing Illinoisans to Use 529 Plans for K-12 Education Expenses

Parents who choose to send their children to K-12 private or parochial schools in Illinois may soon be able to use their Illinois Bright Start program funds to help offset those costs rather than only using those funds for college, due to a new bill filed today by State Representative Peter Breen (R-Lombard). The bill was filed in Springfield as HB 4376.

The new Republican federal tax law clears the way for states to allow residents to use 529 plan accounts for K-12 education expenses, in addition to their current allowed use for college expenses. In Illinois, the 529 plan (Bright Start) specifically only allows funds to be used for higher education or post-secondary training.

“Today’s Bright Start Program does not provide for the recent changes in federal tax law that allow families to use their 529 plan account for K-12 educational expenses,” said Breen. “My bill expands the Illinois Bright Start Program’s definition of ‘qualifying expenses’ so that families may enjoy the full tax benefits newly available through the Republican federal tax law. Expanding the use of these tax-free funds will be help hard-working Illinois families save for their kids’ education.”

Breen’s legislation also provides for a rollover of 529 plan funds into an Achieving a Better Life Experience (ABLE) account for an individual living with a significant disability. Whereas 529 plans may only be used for education, ABLE accounts may also be used for housing, transportation, employment training and support, assistive technology, personal support services and health care expenses. “These types of accounts really help folks living with disabilities to maintain their independence and quality of life,” Breen said. “Individuals with disabilities and their families often rely on public benefits for income, health care, housing and other assistance, and eligibility is largely based on meeting an income threshold. ABLE accounts allow families to create a long-term plan with defined tax benefits for covering the significant costs associated to living with a disability.”

Breen hopes to garner wide bipartisan support for his bill and is pressing for its immediate consideration in the appropriate House committee in the coming weeks.

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