Skill Savings Account Act of 2026

Key Points

• This bill creates a new type of tax-advantaged savings account called a Skill Savings Account. Workers and their employers can contribute money to pay for education and training expenses, and contributions are excluded from taxable income.
• Employees can contribute up to $10,000 per year, while employers can contribute up to $5,250 (reduced by any amounts already excluded under existing employer education assistance programs). Both contributions are tax-free.
• Withdrawals used for anything other than qualified education expenses are subject to regular income tax plus a 20 percent penalty for account holders under age 65, similar to the structure of health savings accounts or retirement accounts.
• The accounts must be held in trust by a bank, insurance company, or approved trustee, and account balances are nonforfeitable, meaning workers keep their money even if they change jobs.
• The bill is bipartisan, introduced by Rep. Thompson of Pennsylvania and Rep. Bonamici, and applies to tax years beginning after December 31, 2025. The Treasury Department has one year after enactment to issue implementing regulations.