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139 STAT. 218 PUBLIC LAW 119–21—JULY 4, 2025 dependent of such individual pursuant to a scholarship for qualified elementary or secondary education expenses of an eligible student which is provided by a scholarship granting organization. ‘‘(b) DEFINITIONS.—In this section, the terms ‘qualified elementary or secondary education expense’, ‘eligible student’, and ‘scholarship granting organization’ have the same meaning given such terms under section 25F(c).’’. (2) CONFORMING AMENDMENT.—The table of sections for part III of subchapter B of chapter 1 is amended by inserting before the item relating to section 140 the following new item: ‘‘Sec. 139K. Scholarships for qualified elementary or secondary education expenses of eligible students.’’. (c) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this sub- section, the amendments made by this section shall apply to taxable years ending after December 31, 2026. (2) EXCLUSION FROM GROSS INCOME.—The amendments made by subsection (b) shall apply to amounts received after December 31, 2026, in taxable years ending after such date. SEC. 70412. EXCLUSION FOR EMPLOYER PAYMENTS OF STUDENT LOANS. (a) IN GENERAL.—Section 127(c)(1)(B) is amended by striking ‘‘in the case of payments made before January 1, 2026,’’. (b) INFLATION ADJUSTMENT.—Section 127 is amended— (1) by redesignating subsection (d) as subsection (e), and (2) by inserting after subsection (c) the following new sub- section: ‘‘(d) INFLATION ADJUSTMENT.— ‘‘(1) IN GENERAL.—In the case of any taxable year beginning after 2026, both of the $5,250 amounts in subsection (a)(2) shall each be increased by an amount equal to— ‘‘(A) such dollar amount, multiplied by ‘‘(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof. ‘‘(2) ROUNDING.—If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.’’. (c) EFFECTIVE DATE.—The amendment made by this section shall apply to payments made after December 31, 2025. SEC. 70413. ADDITIONAL EXPENSES TREATED AS QUALIFIED HIGHER EDUCATION EXPENSES FOR PURPOSES OF 529 ACCOUNTS. (a) IN GENERAL.— (1) IN GENERAL.—Section 529(c)(7) is amended to read as follows: ‘‘(7) TREATMENT OF ELEMENTARY AND SECONDARY TUI- TION.—Any reference in this section to the term ‘qualified higher education expense’ shall include a reference to the fol- lowing expenses in connection with enrollment or attendance at, or for students enrolled at or attending, an elementary or secondary public, private, or religious school: ‘‘(A) Tuition. Definition. 26 USC 127 note. Determination. Effective date. 26 USC 25 note. 26 USC prec. 101.