Amends the Internal Revenue Code, with respect to tax-exempt qualified tuition programs (529 plans), to: (1) make permanent the allowance for computer technology and equipment expenses and require that such technology and equipment be used primarily by the plan beneficiary (formerly, beneficiary and beneficiary's family); (2) allow contributors to a 529 plan or a plan beneficiary to direct plan investments, but not more frequently than four times per calendar year; (3) permit a recontribution to a 529 plan of amounts refunded to a student who withdraws from an educational institution if the recontribution is made not later than 60 days after the date of such refund and does not exceed the refunded amount; and (4) allow tax-free rollovers to a Roth individual retirement account (Roth IRA) of distributions from a qualified tuition program which has been maintained by the account holder for a 10-year period.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4333 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4333
To amend the Internal Revenue Code of 1986 to improve 529 plans.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 27, 2014
Ms. Jenkins (for herself, Mr. Kind, and Mr. Young of Indiana)
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 improve 529 plans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. COMPUTER TECHNOLOGY AND EQUIPMENT ALLOWED AS A QUALIFIED
HIGHER EDUCATION EXPENSE FOR SECTION 529 ACCOUNTS.
(a) Made Permanent.--Clause (iii) of section 529(e)(3)(A) of the
Internal Revenue Code of 1986 is amended by striking ``in 2009 or
2010''.
(b) Only for Use Primarily by the Beneficiary.--Clause (iii) of
section 529(e)(3)(A) of such Code is amended by striking ``used by the
beneficiary and the beneficiary's family'' and inserting ``used
primarily by the beneficiary''.
(c) Effective Date.--The amendments made by this section shall
apply to expenses paid or incurred after December 31, 2010.
SEC. 2. INVESTMENT DIRECTION UNDER QUALIFIED TUITION PROGRAMS.
(a) In General.--Paragraph (4) of section 529(b) of the Internal
Revenue Code of 1986 is amended by striking the period at the end and
inserting ``more frequently than 4 times per calendar year.''.
(b) Clerical Amendment.--The heading for paragraph (4) of section
529(b) of such Code is amended by striking ``No investment direction''
and inserting ``Limited investment direction''.
(c) Effective Date.--The amendments made by this section shall
apply to years beginning after December 31, 2013.
SEC. 3. ELIMINATION OF DISTRIBUTION AGGREGATION REQUIREMENTS.
(a) In General.--Clause (ii) of section 529(c)(3)(D) of the
Internal Revenue Code of 1986 is amended by inserting before the comma
at the end the following: ``, except for purposes of calculating the
earnings portion of any distribution.''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions after December 31, 2013.
SEC. 4. CONTRIBUTION OF AMOUNTS PREVIOUSLY DISTRIBUTED IN CASE OF
WITHDRAWAL FROM SCHOOL.
(a) In General.--Paragraph (3) of section 529(c) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:
``(E) Special rule for contributions relating to
withdrawal from school.--In the case of a beneficiary
who receives a refund of any qualified higher education
expenses from an eligible educational institution in
connection with withdrawal from enrollment at such
institution, subparagraph (A) shall not apply to that
portion of any distribution for the taxable year which
is recontributed to a qualified tuition program of
which such individual is a beneficiary, but only to the
extent such recontribution is made not later than 60
days after the date of such refund and does not exceed
the refunded amount.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to distributions after December 31, 2013.
SEC. 5. SPECIAL ROLLOVER TO ROTH IRA FROM LONG-TERM QUALIFIED TUITION
PROGRAM.
(a) In General.--Paragraph (3) of section 529(c) of the Internal
Revenue Code of 1986, as amended by this Act, is amended by adding at
the end the following new subparagraph:
``(F) Special rollover to roth ira from long-term
qualified tuition program.--For purposes of this
section--
``(i) In general.--In the case of a
distribution from a qualified tuition program
which has been maintained by an account owner
for the 10-year period ending on the date of
such distribution--
``(I) subparagraph (A) shall not
apply to any portion of such
distribution which, not later than 60
days after such distribution, is paid
into a Roth IRA maintained for the
benefit of such account owner or the
designated beneficiary under such
qualified tuition program, and
``(II) such portion shall be
treated as a rollover contribution for
purposes of section 408A(e).
``(ii) Limitation.--Clause (i) shall only
apply to so much of any distribution as does
not exceed the lesser of--
``(I) $25,000, or
``(II) the aggregate amount
contributed to the program (and
earnings attributable thereto) before
the 5-year period ending on the date of
the distribution.''.
(b) Qualified Rollover Contribution.--Paragraph (1) of section
408A(e) of such Code is amended by striking the period at the end of
subparagraph (B) and inserting ``, and'' and by inserting after
subparagraph (B) the following new subparagraph:
``(C) from a covered qualified tuition program (as
defined in section 529(c)(3)(F)(ii)).''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to distributions after December 31, 2013.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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