November 14, 2001

Senate Bill To Allow Educational Savings for Home Schoolers

Senator Tim Hutchinson (R-AR) has introduced a bill that will amend the Internal Revenue Code of 1986 to allow "Coverdell education savings accounts" or ESAs (formerly known as "education individual retirement accounts" or education IRAs) to be used for home schooling expenses. Senate bill 1662 would add the following language to the Internal Revenue Code:

SPECIAL RULE FOR HOMESCHOOLING—Such term shall include expenses described in clause (1) or (iii) of subparagraph (A) in connection with education provided by homeschooling if the requirements of any applicable State or local law are met with respect to such education.

Unlike the education savings account provision for home schoolers in the recent tax package signed by President George W. Bush earlier this year, this amendment would enable all home schoolers to take advantage of the Coverdell provisions-even if they are not recognized by their states as a "private schools."

"Senator Hutchinson told me that he is hoping to have this bill attached to and made part of the this year's economic stimulus package, but that it may receive some opposition," said Caleb Kershner, National Center for Home Education Manager of Federal Policy and Research. "However, the Senator has long been a strong advocate for home school freedom, and I am confident that he and his staff will work hard to ensure that home schoolers are treated fairly under the language of the Coverdell education savings accounts."

Once authorized, the amendment would apply to taxable years beginning with January 1, 2002. For more information and bill status updates, see our active federal legislation page.

 Other Resources

S. 1662—Allowance of Coverdell Education Savings Accounts for Home Schooling Expenses