529 Plans Now Cover Commuting Costs—But Only for Families Who Have Them
H.R. 3574 — To amend the Internal Revenue Code of 1986 to permit qualified distributions from section 529 plans for certain transportation and parking expenses. · Filed by Jennifer McClellan (D-VA) · 1 cosponsor · Introduced May 23, 2025 · Referred to committee
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What it does
This bill expands what families can use 529 college savings plans for by adding transportation and parking expenses to the list of qualified uses. Currently, 529 plans cover tuition, fees, room, and board; this bill lets families withdraw money tax-free for student commuting costs (up to the amount the school includes in its official cost-of-attendance calculation) and for transportation related to apprenticeship programs.
Why we flagged it
The bill straightforwardly expands the list of qualified education expenses under 529 plans by adding transportation and parking. It is a narrow, technical amendment to the Internal Revenue Code with no hidden mechanism or rider.
What the text implies
- Families with lower incomes or without access to 529 plans do not benefit; the tax relief flows only to families already saving through these accounts, potentially widening education-cost inequality.
- The cap on transportation expenses is tied to each school's cost-of-attendance calculation, which varies widely; students at schools with lower published transportation allowances receive less tax-free benefit.
The full analysis lists 3 implications of this text.
Who stands to gain
families with 529 plans; 529 plan administrators (modest volume increase)