What does Preamble of Skill Savings Account Act of 2026 do?

This bill proposes to amend the Internal Revenue Code of 1986. The stated purpose of the bill is to establish skill savings accounts.

What does SHORT TITLE. of Skill Savings Account Act of 2026 do?

This bill is formally titled the Skill Savings Account Act of 2026.

What does SKILL SAVINGS ACCOUNT. of Skill Savings Account Act of 2026 do?

This section amends the Internal Revenue Code of 1986 to establish a 'Skill Savings Account'. Eligible employees can contribute to a skill savings account, and these contributions are excluded from gross income. Employers can also contribute, up to a limit of $5,250 per employee, exceeding amounts excluded under section 127(a)(1). Employee contributions are limited to $10,000 in aggregate annually. Distributions used for 'qualified education expenses' are also excluded from gross income. If distributions are not used for qualified expenses, they are included in gross income and subject to an additional 20% tax (unless the excess contribution is returned before the tax filing deadline). Skill savings accounts must meet specific requirements, including being trusts created in the United States, accepting only cash contributions, and having a trustee that is a bank or other qualified entity. The Secretary of the Treasury is required to issue implementing regulations within one year of the Act's enactment. The amendments apply to taxable years beginning after December 31, 2025.

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Skill Savings Account Act of 2026

Last updated: 5/7/2026 · Introduced: 5/7/2026

Author: Glenn Thompson (R-PA)

TL;DR (AI)

This bill establishes 'Skill Savings Accounts' allowing eligible employees to make tax-excluded contributions up to $10,000 annually.
Employers can contribute up to $5,250 per employee to these accounts, exceeding existing education assistance limits, with contributions also excluded from gross income.
Distributions from Skill Savings Accounts used for qualified education expenses are tax-excluded, while non-qualified distributions are subject to income tax and a 20% penalty.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

3 sections

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