A bill to amend the Internal Revenue Code of 1954 to provide for the establishment of, and the deduction of contributions to, education savings accounts.

Summary

Amends the Internal Revenue Code to allow an income tax deduction for cash and other personal property contributions to a savings account created or organized exclusively for the purpose of paying the higher or vocational educational expenses of the taxpayer or the taxpayer's child. Limits the amount of such deduction to $2,000 per year, adjusted for inflation. Limits eligibility for such deduction to the taxpayer or the taxpayer's dependent child unless such child has attained age 21 or has attended an institution of higher education as a full-time student for more than four weeks in the year of his twenty-first birthday. Excludes distributions from such an account from the gross income of the payee so long as such distributions are used to defray the beneficiary's tuition, fees, books and supplies, and reasonable living expenses. Specifies sanctions for the use of account funds for other than such educational purposes. Treats qualified distributions as income to the beneficiary for the taxable year in which the beneficiary attains age 25, and for each of the following nine years, in successive apportionments equal to ten percent of the total amount of such distributions.

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Documents

1 official file

• Introduced in Senate

  summary · EN · 30 June 1982

  Open at official source

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