S 4023 — Lifelong Learning and Training Account Act of 2021

Summary

Lifelong Learning and Training Account Act of 2021 This bill establishes tax-exempt savings accounts that may be used to pay for training expenses and will be managed by state programs known as Lifelong Learning and Training Account programs. Tax-exempt distributions from an account may be used for training that results in a recognized postsecondary credential, such as an industry-recognized certificate or certification, a license recognized by the federal government or a state, or an associate or baccalaureate degree. The bill specifies contribution limits, age restrictions, and income limits that apply to beneficiaries of the accounts. Accounts that meet the requirements are eligible to receive certain federal matching funds for contributions made by the beneficiary or an employer.

Bill Text

• Introduced Introduced in Senate Current html April 07, 2022

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The bill establishes Lifelong Learning and Training Account programs, allowing tax-exempt contributions and distributions for qualified training expenses.

• Internal Revenue Code of 1986

  Part VIII of subchapter F of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 530 the following new section: SEC. 530A. LIFELONG LEARNING AND TRAINING ACCOUNT PROGRAMS.

  Introduces a new section for Lifelong Learning and Training Account programs.

• SEC. 530A

  A Lifelong Learning and Training Account program shall be exempt from taxation under this subtitle.

  Establishes tax exemption for Lifelong Learning and Training Account programs.

• SEC. 530A

  Notwithstanding the preceding sentence, such program shall be subject to the taxes imposed by section 511.

  Ensures that Lifelong Learning and Training Account programs are subject to unrelated business income taxes.

• SEC. 530A

  For purposes of this section-- (1) In general.--The term 'Lifelong Learning and Training Account program' means a program established and maintained by a State or agency or instrumentality thereof-- (A) under which the designated beneficiary of the account or their employer may make contributions to an account which is established for the purpose of meeting the qualified training expenditures of such beneficiary, and (B) which meets the other requirements of this section.

  Defines Lifelong Learning and Training Account programs and their purpose.

• SEC. 530A

  Except to the extent provided in regulations, a program shall not be treated as a Lifelong Learning and Training Account program unless such program provides that amounts are held in a qualified trust and such program has received a ruling or determination by the Secretary that such program meets the applicable requirements for a Lifelong Learning and Training Account program.

  Establishes additional requirements for programs to be recognized as Lifelong Learning and Training Account programs.

• SEC. 530A

  A program shall not be treated as a Lifelong Learning and Training Account program unless it provides-- (i) that contributions may only be made in cash, (ii) separate accounting for each designated beneficiary, (iii) that no interest in the program or any portion thereof may be used as security for a loan, (iv) that no contributions may be made on behalf of a designated beneficiary-- (I) in excess of $2,000 during any calendar year, (II) if the total amount in the account of such beneficiary is in excess of $15,000, or (III) during any calendar year which begins after such beneficiary attains 57 years of age.

  Sets specific contribution limits and conditions for Lifelong Learning and Training Account programs.

Action History

1. April 07, 2022

   Introduced in Senate

2. April 07, 2022

   Read twice and referred to the Committee on Finance.

Sponsors

• Mark R. Warner · Primary

Subjects