Vitter Co-Sponsors Bill To Encourage Savings For Education Expenses
(Metairie, La.) – U.S. Sen. David Vitter (R-La.) signed on to legislation authored by Sen. Mark Kirk (R-Ill.) that would make reforms to Coverdell savings accounts, which are designed to encourage savings for education expenses. The bill would increase the limit that the federal government has set on what a family can contribute each year.
“Education is among the best investments a family can make. And as the father of four, I know education expenses add up quick,” Vitter said. “Making these reforms to savings accounts will make it easier for all families to save more money for education, without the government setting an unrealistically low limit. It also gives families more flexibility on how they can spend their savings.”
Coverdell savings accounts are opened on behalf of beneficiaries under 18 years old to save for elementary and secondary education. Currently, the total contribution to all accounts on behalf of a beneficiary in any year cannot exceed $2,000. The bill would remove the income restriction on contributors to the account and raise the annual contribution limit to match the annual gift tax exclusion, which is $14,000 for 2014.
The bill would also give families more flexibility on how they choose to spend their savings. It will allow home-schooling expenses to qualify as eligible expenses of Coverdell savings accounts and allow savings to be put towards a Roth IRA or the purchase of a first-home once beneficiaries have completed their education.