HR 529 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

H. R. 529CommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to treat computer technology and equipment as eligible higher education expenses for 529 plans, to allow certain individuals a credit against income tax for contributions to 529 plans, and for other purposes.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

February 8, 2011CommentsClose CommentsPermalink

Ms. JENKINS (for herself, Mr. KIND, Mr. WESTMORELAND, Mr. FILNER, Mr. SARBANES, Mr. CHAFFETZ, Mr. YARMUTH, Ms. LEE of California, and Mr. LEWIS of Georgia) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to treat computer technology and equipment as eligible higher education expenses for 529 plans, to allow certain individuals a credit against income tax for contributions to 529 plans, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Savings Enhancement for Education in College Act’.CommentsClose CommentsPermalink

SEC. 2. COMPUTER TECHNOLOGY AND EQUIPMENT ALLOWED AS A QUALIFIED HIGHER EDUCATION EXPENSE FOR SECTION 529 ACCOUNTS.

(a) In General- Section 529(e)(3)(A) of the Internal Revenue Code of 1986 is amended by striking ‘and’ at the end of clause (i), by striking the period at the end of clause (ii), and by adding at the end the following:CommentsClose CommentsPermalink





‘(iii) expenses paid or incurred for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used primarily by the designated beneficiary while enrolled at an eligible educational institution.CommentsClose CommentsPermalink





Clause (iii) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to expenses paid or incurred after December 31, 2010, in taxable years ending after such date.CommentsClose CommentsPermalink

SEC. 3. CREDIT FOR CONTRIBUTIONS TO 529 PLANS.

(a) In General- Subsection (d) of section 25B of the Internal Revenue Code of 1986 (relating to elective deferrals and IRA contributions by certain individuals) is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph:CommentsClose CommentsPermalink





‘(2) CONTRIBUTIONS TO QUALIFIED TUITION PROGRAMS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified savings contribution’ includes the amount of any purchase or contribution described in paragraph (1)(A) of section 529(b) to a qualified tuition program (as defined in such section) if--CommentsClose CommentsPermalink





‘(i) the taxpayer has the power to authorize distributions and otherwise administer the account, andCommentsClose CommentsPermalink





‘(ii) the designated beneficiary of such purchase or contribution is the taxpayer, the taxpayer’s spouse, or an individual with respect to whom the taxpayer is allowed a deduction under section 151.CommentsClose CommentsPermalink





‘(B) LIMITATION BASED ON COMPENSATION- The amount treated as a qualified savings contribution by reason of subparagraph (A) for any taxable year shall not exceed the sum of--CommentsClose CommentsPermalink





‘(i) the compensation (as defined in section 219(f)(1)) includible in the taxpayer’s gross income for the taxable year, andCommentsClose CommentsPermalink





‘(ii) the amount excluded from the taxpayer’s gross income under section 112 (relating to combat pay) for such year.CommentsClose CommentsPermalink





‘(C) DETERMINATION OF ADJUSTED GROSS INCOME- Solely for purposes of determining the applicable percentage under subsection (b) which applies with respect to the amount treated as a qualified savings contribution by reason of subparagraph (A), adjusted gross income (determined without regard to this subparagraph) shall be increased by the excess (if any) of--CommentsClose CommentsPermalink





‘(i) the social security benefits received during the taxable year (within the meaning of section 86), overCommentsClose CommentsPermalink





‘(ii) the amount included in gross income for such year under section 86.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 25B of such Code is amended by striking ‘qualified retirement savings’ each place it appears in the text and inserting ‘qualified savings’.CommentsClose CommentsPermalink





(2) The subsection heading for section 25B(d) of such Code is amended by striking ‘Retirement’.CommentsClose CommentsPermalink





(3) Subparagraph (A) of section 25B(d)(3) of such Code, as redesignated by subsection (a), is amended--CommentsClose CommentsPermalink





(A) by striking ‘paragraph (1)’ the first place it appears and inserting ‘paragraph (1) or (2)’, andCommentsClose CommentsPermalink





(B) by striking ‘paragraph (1)’ the second place it appears and inserting ‘paragraph (1), or (2), as the case may be,’.CommentsClose CommentsPermalink





(4) The heading for section 25B of such Code is amended by striking ‘and ira contributions’ and inserting ‘, ira contributions, and qualified tuition program contributions’.CommentsClose CommentsPermalink





(5) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 25B and inserting the following new item:CommentsClose CommentsPermalink





‘Sec. 25B. Elective deferrals, IRA contributions, and qualified tuition program contributions by certain individuals.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to contributions made after December 31, 2010, in taxable years ending after such date.CommentsClose CommentsPermalink

SEC. 4. INVESTMENT DIRECTION UNDER QUALIFIED TUITION PROGRAMS.

(a) In General- Paragraph (4) of section 529(b) of the Internal Revenue Code of 1986 (relating to investment direction) is amended by striking the period at the end and inserting ‘more frequently than 4 times per calendar year.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to years beginning after December 31, 2010.CommentsClose CommentsPermalink

SEC. 5. EXCLUSION FROM GROSS INCOME FOR EMPLOYER CONTRIBUTIONS TO QUALIFIED TUITION PROGRAMS.

(a) In General- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 127 the following new section:CommentsClose CommentsPermalink

‘SEC. 127A. EMPLOYER CONTRIBUTIONS TO QUALIFIED TUITION PROGRAMS.

‘(a) In General- Gross income of an employee does not include amounts paid by the employer as contributions to a qualified tuition program held by the employee or spouse of the employee if the contributions are made pursuant to a program which is described in subsection (b).CommentsClose CommentsPermalink





‘(b) Maximum Exclusion- The amount excluded from the gross income of an employee under this section for the taxable year shall not exceed $600.CommentsClose CommentsPermalink





‘(c) Qualified Tuition Assistance Program- For purposes of this section, a qualified tuition assistance program is a separate written plan of an employer for the benefit of such employer’s employees--CommentsClose CommentsPermalink





‘(1) under which the employer makes matching contributions to qualified tuition programs of--CommentsClose CommentsPermalink





‘(A) such employees,CommentsClose CommentsPermalink





‘(B) their spouses, orCommentsClose CommentsPermalink





‘(C) any individual with respect to whom such an employee or spouse--CommentsClose CommentsPermalink





‘(i) is allowed a deduction under section 151, andCommentsClose CommentsPermalink





‘(ii) has the power to authorize distributions and otherwise administer such individual’s account under the qualified tuition program, andCommentsClose CommentsPermalink





‘(2) which meets requirements similar to the requirements of paragraphs (2), (3), (4), (5), and (6) of section 127(b).CommentsClose CommentsPermalink





‘(d) Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





‘(1) QUALIFIED TUITION PROGRAM- The term ‘qualified tuition program’ means a qualified tuition program as defined in section 529(b).CommentsClose CommentsPermalink





‘(2) EMPLOYEE AND EMPLOYER- The terms ‘employee’ and ‘employer’ shall have the meaning given such terms by paragraphs (2) and (3), respectively, of section 127(c).CommentsClose CommentsPermalink





‘(3) APPLICABLE RULES- Rules similar to the rules of paragraphs (4), (5), (6), and (7) of section 127(c) shall apply.CommentsClose CommentsPermalink





‘(e) Inflation Adjustment-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2011, the $600 amount contained in subsection (b)(1) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(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 2010’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50.CommentsClose CommentsPermalink





‘(f) Cross Reference- For reporting and recordkeeping requirements, see section 6039D.’.CommentsClose CommentsPermalink





(b) Exclusion From Employment Taxes-CommentsClose CommentsPermalink





(1) Sections 3121(a)(18), 3306(b)(13), and 3401(a)(18) of such Code are each amended by inserting ‘127A,’ after ‘127,’ each place it appears.CommentsClose CommentsPermalink





(2) Section 3231(e)(6) of such Code is amended by striking ‘section 127’ and inserting ‘section 127 or 127A’.CommentsClose CommentsPermalink





(c) Reporting and Recordkeeping Requirements- Section 6039D(d)(1) of such Code is amended by inserting ‘127A,’ after ‘127,’.CommentsClose CommentsPermalink





(d) Other Conforming Amendments-CommentsClose CommentsPermalink





(1) Sections 125(f), 414(n)(3)(C), and 414(t)(2) of such Code are each amended by inserting ‘127A,’ after ‘127,’ each place it appears.CommentsClose CommentsPermalink





(2) Section 132(j)(8) of such Code is amended by striking ‘section 127’ and inserting ‘section 127 or 127A’.CommentsClose CommentsPermalink





(3) Section 1397(a)(2)(A) of such Code is amended by inserting at the end the following new clause:CommentsClose CommentsPermalink





‘(iii) Any amount paid or incurred by an employer which is excludable from the gross income of an employee under section 127A, but only to the extent paid or incurred to a person not related to the employer.’.CommentsClose CommentsPermalink





(4) Section 209(a)(15) of the Social Security Act (42 U.S.C. 409(a)(15)) is amended by striking ‘or 129’ and inserting ‘, 127A, or 129’.CommentsClose CommentsPermalink





(e) Clerical Amendment- The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 127 the following new item:CommentsClose CommentsPermalink





‘Sec. 127A. Employer contributions to qualified tuition programs.’.CommentsClose CommentsPermalink





(f) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink