Bills · HR 7205
IN COMMITTEE· 119TH CONGRESS
House BillHR 7205Taxation
Application FEES Act
INTRO JAN 22· LAST ACTION JAN 22
READING
1MIN
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- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because it slightly expands the types of educational expenses that families can pay for using tax-advantaged 529 college savings plans. Currently, when families take money out of a 529 plan for non-qualified expenses, they have to pay income tax on the earnings and usually a 10% penalty.
By making college application fees a "qualified expense," the bill removes this tax and penalty for these specific withdrawals. While application fees might seem small compared to tuition, they can add up, especially for students applying to many schools. If this becomes law, it provides a bit more flexibility for families to use their savings for all aspects of the college journey, right from the initial application stage.
KEY PROVISIONS
3AI-extractedPROVISION 01
Allows 529 plans to cover college application fees by adding these fees to the list of 'qualified higher education expenses' in the Internal Revenue Code.
This makes withdrawals from a 529 plan for college application fees tax-free and penalty-free.
PROVISION 02
Amends Section 529(e)(3)(A) of the Internal Revenue Code of 1986.
This is the specific legal mechanism by which the change to 529 plan eligible expenses is made.
PROVISION 03
The changes will apply to distributions made after the date the bill becomes law.
This sets the effective date for when account holders can begin using 529 funds for application fees without penalty.
SPONSORSHIP
1 + 0
D· Oregon
YRS IN OFFICE
1
BILLS LED
24
ACTION TIMELINE
2 EVENTSJAN 22
Introduced in House
JAN 22
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 7205
Congress119th
StatusIn Committee
IntroducedJan 22, 2026
Last actionJan 22, 2026
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED JAN 22, 2026
House BillHR 7205Taxation
Application FEES Act
INTRODUCED JAN 22, 2026· LAST ACTION JAN 22, 2026
PASSAGE CHANCES
—%
READING
1 min
COSPONSORS
0
COMPLEXITY
Moderate
