ACE Act

The ACE Act expands 529 education savings accounts to cover elementary and secondary school expenses, including homeschooling, tutoring, educational therapies, and materials, for families enrolled in public, private, or religious schools. It increases the annual distribution limit from $10,000 to $20,000 for K-12 expenses and adds a $20,000 annual gift tax exclusion for contributions to these accounts. The bill also requires states with tax-exempt bonds for education to have school choice programs (like vouchers or scholarships) that meet specific eligibility and funding criteria. These provisions directly affect families using 529 plans for K-12 education and states administering education funding. The changes apply to distributions and gifts after 2026, with bond restrictions taking effect upon enactment.