S. 1515 — Introduced in Senate

II 113th CONGRESS 1st Session S. 1515 IN THE SENATE OF THE UNITED STATES September 18, 2013Mr. Kirk 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 and expand education savings accounts. 1. Short title This Act may be cited as the 401Kids Family Savings Act of 2013. 2. Conversion of Coverdell education savings accounts to 401Kids savings accounts (a) In general Section 530 of the Internal Revenue Code of 1986 is amended by striking Coverdell education savings account each place it appears in subsection (a), subsection (b)(1), subsection (b)(4), subsection (d)(4)(A), subsection (d)(5), subsection (d)(6), subsection (d)(9), and subsection (h), and inserting 401Kids savings account. (b) Conforming amendments (1) The heading of section 530 of the Internal Revenue Code of 1986 is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (2) The heading of paragraph (1) of section 530(b) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (3) Section 26(b)(2)(E) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (4) Section 72(e)(9) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (5) The heading of paragraph (9) of section 72(e) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (6) Section 135(c)(2)(C) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (7) The heading of subparagraph (C) of section 135(c)(2) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (8) Section 408A(e)(2)(A)(ii) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (9) The heading of clause (vi) of section 529(c)(3)(B) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (10) Section 529(c)(6) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (11) Section 877A(e)(2) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (12) Section 4973(a)(4) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (13) Section 4973(e)(1) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (14) Section 4973(e)(2)(A) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (15) The heading of subsection (e) of section 4973 of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (16) Section 4975(c)(5) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (17) The heading of paragraph (5) of section 4975(c) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (18) Section 4975(e)(1)(F) of such Code is amended by striking Coverdell education savings account and inserting 401Kids savings account. (19) Section 6693(a)(2)(E) of such Code is amended by striking Coverdell education savings accounts and inserting 401Kids savings accounts. (20) The heading of part VIII of subchapter F of chapter 1 of such Code is amended by striking Higher education savings and inserting Education and children's savings. (c) Clerical amendments (1) The item relating to part VIII in the table of parts for subchapter F of chapter 1 of the Internal Revenue Code of 1986 is amended to read as follows: Part VIII. Education and children's savings entities . (2) The table of sections for part VIII of subchapter F of chapter 1 of such Code is amended by striking the item relating to section 530 and inserting the following new item: Sec. 530. 401Kids savings accounts. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 3. Qualified distributions for first home purchases (a) In general Paragraph (1) of section 530(b) of the Internal Revenue Code of 1986 is amended by striking qualified education expenses and inserting qualified expenses. (b) Qualified expenses Subsection (b) of section 530 of the Internal Revenue Code of 1986 is amended by redesignating paragraphs (2), (3), and (4) as paragraphs (4), (5), and (6), respectively, and by inserting after paragraph (1) the following new paragraphs: (2) Qualified expenses The term qualified expenses means— (A) qualified first-time homebuyer expenses, and (B) qualified education expenses. (3) Qualified first-time homebuyer expenses (A) In general The term qualified first-time homebuyer expenses means, in the case of a designated beneficiary who is a first-time homebuyer, the qualified acquisition costs with respect to a principal residence of such beneficiary. (B) Definitions The terms first-time homebuyer, qualified acquisition costs, and principal residence have the same meaning as when used in section 72(t)(8). . (c) Conforming amendments (1) Paragraph (4)(A)(ii) (as redesignated by subsection (b)) of section 530(b) of the Internal Revenue Code of 1986 is amended by striking as defined in paragraph (3) and inserting as defined in paragraph (5). (2) Subparagraphs (A), (B), and (D) of section 530(d)(1) of such Code are each amended by striking qualified education expenses each place it appears and inserting qualified expenses. (3) The heading of paragraph (2) of section 530(d) of such Code is amended by striking education expenses and inserting expenses. (4) The heading of paragraph (4) of section 530(d) of such Code is amended by striking educational expenses and inserting expenses. (5) Subclause (I) of section 529(c)(3)(B)(vi) of such Code is amended by striking to which clauses (i) and (ii) and section 530(d)(2)(A) apply and inserting for qualified higher education expenses to which clauses (i) and (ii) apply and for qualified education expenses to which section 530(d)(2)(A) applies. (6) Clause (vi) of section 529(c)(3)(B) of such Code is amended by striking and section 530(d)(2)(A). and inserting and the amount of the exclusion with respect to qualified education expenses under section 530(d)(2)(A).. (d) Effective date The amendments made by this section shall apply to distributions made in taxable years beginning after the date of the enactment of this Act. 4. Qualified rollover contributions from 401Kids savings accounts to Roth IRAs (a) In general Paragraph (5) of section 530(d) of the Internal Revenue Code of 1986 is amended by inserting , or into a Roth IRA of the beneficiary after as of such date. (b) Conforming amendment; technical correction Paragraph (1) of section 408A(e) of the Internal Revenue Code of 1986 is amended to read as follows: (1) In general The term qualified rollover contribution means a rollover contribution to a Roth IRA from another such account, from an eligible retirement plan (as defined in section 402(c)(8)(B)), or from a 401Kids savings account (as defined in section 530(b)(1)), but only if— (A) such rollover contribution meets the requirements of section 408(d)(3), (B) in the case of a rollover contribution from an eligible retirement plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B), such contribution meets the requirements of section 402(c), 403(b)(8), or 457(e)(16), whichever is applicable, and (C) in the case of a rollover contribution from a 401Kids savings account, such contribution meets the requirements of section 530(d)(5). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. . (c) Effective date The amendments made by this section shall apply to rollover contributions made in taxable years beginning after the date of the enactment of this Act.