ACE Act

The ACE Act (S 3520) expands the use of 529 education savings accounts to cover a broader range of elementary and secondary school expenses, including homeschooling, tutoring, educational therapies, and standardized test fees, while raising the annual distribution limit from $10,000 to $20,000. It also increases the annual gift tax exclusion for contributions to 529 plans, allowing up to $20,000 in gifts to be excluded from gift tax calculations. Additionally, the bill restricts tax-exempt bonds for school construction to states with school choice programs that meet specific criteria, such as having at least 40% of school-age children eligible for such programs and spending at least 60% of per-pupil funds on eligible students. These provisions apply to distributions, gifts, and bonds after the bill's effective dates.