U.S. Senators Amy Klobuchar (D-MN) and Dave McCormick(R-PA) last month reintroduced a bill to enhance access to skills training. The Skills Investment Act would expand Coverdell Education Savings Accounts (ESAs) — tax advantaged savings accounts for educational expenses — so American workers can use the accounts to pay for skills training, career-related learning, adult education, and professional development. 

Companion legislation for the Skills Investment Act was introduced in the House of Representatives by U.S. Representatives Glenn “GT” Thompson (R-PA), Suzanne Bonamici (D-OR), Brian Fitzpatrick (R-PA), and Brad Schneider (D-IL).

“Now more than ever, innovation is key to moving the American economy forward. With technological advancements in manufacturing and many other parts of our economy, it is critical that American workers are positioned for success. That means increasing access to the specialized training and education needed to pursue good-paying, high-demand careers,” said Klobuchar. “Our bipartisan Skills Investment Act will modernize tax advantaged savings accounts so workers can build skills for the 21st century economy.”

The Skills Investment Act transforms Coverdell ESAs into lifelong learning accounts, allowing workers to use tax-advantaged savings to pay for education and skills training programs throughout an account holder’s lifetime. The bill would eliminate the age-based contribution limit on Coverdell ESAs and expand the scope of allowable distributions to cover a broad array of career and technical education services. These savings accounts would now be eligible for pretax contributions and mid-career workers would be allowed to contribute up to $4,000 tax-free each year, with a maximum contribution limit of $10,000. Employers would receive a 25 percent tax credit for contributions to a worker’s account.