Jumpstart Savings Act

Bill Number

H.R. 7115

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-01-15: Referred to the House Committee on Ways and Means.

Last Updated

2026-02-12T09:06:26Z

AI-Generated Summary

Purpose of the Legislation

The Jumpstart Savings Act (H.R. 7115) aims to encourage savings for vocational training and apprenticeships by creating a new tax-advantaged savings program. It amends the Internal Revenue Code of 1986 to establish "Jumpstart Programs," modeled after existing college savings plans (known as 529 plans), but focused on expenses related to trade occupations, professions, and apprenticeships.

Key Provisions

• Establishment of Jumpstart Programs (Section 529B): States or their agencies can create these programs, where individuals contribute to accounts for a designated beneficiary (e.g., a family member or themselves). Earnings in the accounts grow tax-free if used for qualified expenses.
• Qualified Expenses: Withdrawals are tax-free for:
• Costs of registered apprenticeship programs certified by the U.S. Department of Labor.
• Tuition, fees, books, supplies, and equipment for associate degrees or certifications at community or technical colleges.
• Fees for trade or occupation certifications or licenses.
• Tools and equipment bought for use in a trade or occupation.
• Startup costs to establish a business in a trade or profession (limited to necessary expenses for setup and operation).
• Tax Treatment: Similar to 529 plans—contributions are not tax-deductible federally, but qualified withdrawals are tax-free. Non-qualified withdrawals may incur taxes and a 10% penalty. Programs are exempt from most taxes but subject to unrelated business income tax (a tax on income from activities not related to a program's main purpose, like for charities).
• Rollover Option: Allows transferring funds from existing 529 college savings plans to a Jumpstart Program without tax penalties, for the beneficiary or a family member.
• Reporting Requirements: Program administrators must report contributions, distributions, and other details to the IRS and beneficiaries annually. Failure to report can result in penalties.
• Effective Date: Applies to tax years beginning after December 31, 2025.

Significant Changes to Existing Law

• Introduces a new section (529B) to the Internal Revenue Code, creating a dedicated savings vehicle for vocational and trade training, separate from but similar to 529 plans (for higher education) and ABLE accounts (for disabilities).
• Expands 529 plan rules to permit rollovers into Jumpstart Programs, providing flexibility for shifting savings from college to trade-focused goals.
• Adds penalties for non-compliance with reporting under section 6693, integrating Jumpstart Programs into existing IRS oversight.

Potential Impacts

• On Citizens: Provides tax incentives to save for skilled trades, potentially making apprenticeships and certifications more affordable. This could help individuals enter high-demand jobs like plumbing, welding, or electrical work without college debt, boosting workforce participation in non-degree careers.
• On Government Agencies: The IRS will need to update forms, guidance, and enforcement for the new programs, including tracking rollovers and reports. States may incur costs to set up and administer programs but could see economic benefits from a stronger skilled workforce.
• On International Relations: No direct impacts, as the bill focuses on domestic tax policy and workforce development.

Main Stakeholders Affected

• Individuals and Families: Those saving for or pursuing apprenticeships, trade certifications, or small business startups in skilled occupations; beneficiaries gain access to tax-free savings.
• States and Educational Institutions: State governments must establish and maintain programs; community and technical colleges benefit from increased enrollment in vocational programs.
• Federal Government (IRS): Handles tax exemptions, reporting, and penalties; oversees compliance similar to 529 plans.
• Financial and Trade Organizations: Banks and investment firms can offer Jumpstart accounts; trade unions and apprenticeship sponsors (e.g., under the National Apprenticeship Act) see more funding for training.

Notable Legal, Constitutional, or Political Implications

• Legal: Expands tax incentives beyond traditional higher education to vocational training, promoting equity by supporting non-college pathways. It aligns with the National Apprenticeship Act (1937) by facilitating funding for certified programs, but requires states to adopt similar rules to 529 plans for uniformity.
• Constitutional: No major issues; the bill operates within Congress's taxing and spending powers under Article I, without infringing on state rights (as programs are state-run but federally tax-exempt).
• Political: Sponsored by bipartisan members (Democrats and Republicans), it reflects support for workforce development amid labor shortages in trades. Could influence future education policy by shifting focus from four-year degrees to practical skills training, potentially reducing reliance on federal student aid programs.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Moore, Riley M. [R-WV-2]

Cosponsors (12)

Rep. Rulli, Michael A. [R-OH-6], Rep. Hinson, Ashley [R-IA-2], Rep. Goldman, Craig A. [R-TX-12], Rep. Moore, Barry [R-AL-1], Rep. Ciscomani, Juan [R-AZ-6], Rep. Owens, Burgess [R-UT-4], Rep. Finstad, Brad [R-MN-1], Rep. Perez, Marie Gluesenkamp [D-WA-3], Rep. Shreve, Jefferson [R-IN-6], Rep. Burchett, Tim [R-TN-2], Rep. Wied, Tony [R-WI-8], Rep. Gill, Brandon [R-TX-26]

Recent Actions

• 2026-01-15: Referred to the House Committee on Ways and Means.
• 2026-01-15: Introduced in House
• 2026-01-15: Introduced in House

Bill Versions

• Jumpstart Savings Act — issued 2026-01-15 — PDF (6 pages)