H.R. 4333 — Introduced in House

I 113th CONGRESS 2d Session H. R. 4333 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. 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. 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. 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. 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. 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.