SF2137: Qualified Education Expenses

Revises the definition of 'qualified education expenses' in Iowa law by eliminating language referencing Public Law 115-97 and instead relies on the general definition provided by the Internal Revenue Code of 1986, as amended. This change streamlines the definition and avoids unnecessary specificity, ensuring that the state law remains aligned with current federal law regarding eligible uses of education savings plans.

Key Points & Impacts:

• Removes an explicit reference to 'as amended by Pub. L. No. 115-97' from the definition of qualified education expenses.

• Continues to define 'qualified education expenses' by reference to Section 529(e)(3) of the Internal Revenue Code.

• Maintains inclusion of elementary and secondary school tuition expenses, subject to federal limitations.

• Retains inclusion of apprenticeship program expenses as qualified education expenses, provided the program is registered and certified with the U.S. Secretary of Labor.

• Allows payment of principal or interest on qualified education loans for a beneficiary or their sibling, within federal limitations.

• Ensures Iowa law's definition of qualified education expenses stays current with federal tax law changes by avoiding outdated references.

• Simplifies statutory language, reducing the need for future legislative updates if federal law changes.

Signed by Governor on April 9. Takes effect July 1, 2026.