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S. 335 (114th): A bill to amend the Internal Revenue Code of 1986 to improve 529 plans.


The text of the bill below is as of Feb 2, 2015 (Introduced).


II

114th CONGRESS

1st Session

S. 335

IN THE SENATE OF THE UNITED STATES

February 2, 2015

(for himself, Mr. Casey, Mr. Burr, Mr. Warner, Mr. Roberts, and Mr. Cardin) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to improve 529 plans.

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, 2014.

2.

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, 2014.

3.

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, 2014.