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 individual taxpayer an income tax deduction for contributions to a savings account established to pay the educational expenses (tuition, supplies, meals, and lodging) of such taxpayer or the taxpayer's child at an institution of higher education or a vocational school. Limits the amount of such deduction to $2,000 (adjusted for inflation) for an account per year. Specified that no individual may be a beneficiary of more than one account during any calendar year. Excludes from the gross income of the individual who contributed to the account any amounts: (1) used exclusively to pay the educational expenses incurred by the individual for whose benefit the account is established; or (2) transferred to a qualified State educational fund. Requires the individual for whose benefit the educational savings account was established to include the amounts distributed from an educational savings account in income over a ten year period. Exempts from taxation an educational savings account unless such account ceases to be an educational savings account. Specified penalties for the use of account funds for other than educational purposes. Requires the trustee of an educational savings account to make periodic reports to the Secretary of the Treasury. Provides that payments made by an individual to an educational savings account for the benefit of his child shall not be considered a gift of a future interest in property.

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Documents

1 official file

• Introduced in Senate

  summary · EN · 22 May 1984

  Open at official source

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