I 111th CONGRESS 1st Session H. R. 1351 IN THE HOUSE OF REPRESENTATIVES March 5, 2009 Mr. Pomeroy (for himself, Mr. Tiberi, Mr. Meek of Florida, Mr. Kind, and Ms. Jenkins) introduced the following bill; which was referred to the Committee on Ways and Means A BILL 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.
1.
Short title
This Act may be cited as the Savings Enhancement for Education in College Act.
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: (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. Clause (iii) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.. (b)
Effective date
The amendments made by this section shall apply to expenses paid or incurred after December 31, 2010.
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: (2)
Contributions to qualified tuition programs
(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— (i)the taxpayer has the power to authorize distributions and otherwise administer the account, and (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. (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— (i)the compensation (as defined in section 219(f)(1)) includible in the taxpayer’s gross income for the taxable year, and (ii)the amount excluded from the taxpayer’s gross income under section 112 (relating to combat pay) for such year. (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— (i)the social security benefits received during the taxable year (within the meaning of section 86), over (ii)the amount included in gross income for such year under section 86. . (b)
Conforming amendments
(1)Section 25B of such Code is amended by striking qualified retirement savings each place it appears in the text and inserting qualified savings. (2)The subsection heading for section 25B(d) of such Code is amended by striking retirement. (3)Subparagraph (A) of section 25B(d)(3) of such Code, as redesignated by subsection (a), is amended— (A)by striking paragraph (1) the first place it appears and inserting paragraph (1) or (2), and (B)by striking paragraph (1) the second place it appears and inserting paragraph (1), or (2), as the case may be,. (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. (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: Sec. 25B. Elective deferrals, IRA contributions, and qualified tuition program contributions by certain individuals.. (c)
Effective date
The amendments made by this section shall apply to contributions made after December 31, 2009.
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 2 times per calendar year.. (b)
Effective date
The amendments made by this section shall apply to years beginning after December 31, 2008.