Skill Savings Account Act of 2026

The Skill Savings Account Act of 2026 creates a new type of tax-advantaged account designed to help eligible U.S. employees save money specifically for qualified education expenses. Under this bill, both employers and employees can contribute cash to these accounts without immediately paying income tax, provided the total contributions do not exceed $5,250 for employer contributions and $10,000 for employee contributions in a single year. Funds withdrawn from the account must be used exclusively for education costs to remain tax-free; otherwise, the distribution is taxed as income and subject to an additional 20% penalty for beneficiaries under age 65. The legislation also establishes specific rules for trust management and requires the Treasury Department to issue regulations within one year of enactment.