,,ii  #aac? ,,congress  #b;d ,session   
,s4 #bhhb  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,septemb] #ah1         
#bjad,mr4 ,mc,connell introduc$ ! foll[+
 bill2 :i* 0 read twice & ref]r$ to !   
,committee on ,f9ance  ,a ,,bill  ,to   
am5d ! ,int]nal ,rev5ue ,code ( #aihf to
 all[ c]ta9 individuals a cr$it aga9/   
income tax = contributions to #ebi      
plans1 & = o!r purposes4  #a4 ,%ort     
title ,?is ,act may be cit$ z ! ,enhanc$
 #ebi - ,sett+ ,aside = a ,valuable     
,education ,act or ! ,enhanc$ #ebi -    
,s4,a4,v4,e4 ,act4  #b4 ,cr$it =        
contributions to #ebi plans  7a7 ,9     
g5]al ,p>agraph 7#a7 ( section #be;,b7d7
 ( ! ,int]nal ,rev5ue ,code ( #aihf is  
am5d$ by /rik+ & at ! end ( subp>agraph 
7,b77ii71 by /rik+ ! p]iod at ! end (   
subp>agraph 7,c7 & ins]t+ 1 &1 & by add+
 at ! end ! foll[+ new subp>agraph3     
7,d7 ! am\nt ( ! contributions to       
qualifi$ tuition programs describ$ 9    
p>agraph 7#b7 made by ! eligible        
individual4  4  7b7 ,contributions to   

qualifi$ tuition programs ,subsection   
7d7 ( section #be;,b ( ! ,int]nal       
,rev5ue ,code ( #aihf is am5d$ by       
r$esignat+ p>agraph 7#b7 z p>agraph 7#c7
 & by ins]t+ aft] p>agraph 7#a7 ! foll[+
 new p>agraph3  7#b7 ,contributions to  
qualifi$ tuition programs  7,a7 ,9 g5]al
 ,! t]m contributions to qualifi$       
tuition programs means any pur*ase or   
contribution describ$ 9 p>agraph        
7#a77;,a7 ( section #ebi7;b7 to a       
qualifi$ tuition program 7z def9$ 9 su* 
section7 if-- 7i7 ! eligible individual 
has ! p[] to au?orize di/ributions &    
o!rwise adm9i/] ! acc\nt1 &  7ii7 !     
designat$ b5efici>y ( su* pur*ase or    
contribution is ! eligible individual1 !
 eligible individual's sp\se1 or an     
individual ) respect to :om ! eligible  
individual is all[$ a d$uction "u       
section #aea4  7,b7 ,limitation bas$ on 
comp5sation ,! am\nt treat$ z a qualifi$
 sav+s contribution by reason (         
subp>agraph 7,a7 = any taxable ye> %all 
n exce$ ! sum (-- 7i7 ! comp5sation 7z  

def9$ 9 section #bai7;f77#a77 includible
 9 ! eligible individual's gross income 
= ! taxable ye>1 &  7ii7 ! am\nt exclud$
 f ! eligible individual's gross income 
"u section #aab 7relat+ to combat pay7 =
 su* ye>4  7,c7 ,det]m9ation ( adju/$   
gross income ,solely = purposes (       
det]m9+ ! applicable p]c5tage "u        
subsection 7b7 :i* applies ) respect to 
! am\nt treat$ z contributions to       
qualifi$ tuition programs1 adju/$ gross 
income 7det]m9$ )\t reg>d to ?is        
subp>agraph7 %all be increas$ by !      
excess 7if any7 (-- 7i7 ! social        
security b5efits receiv$ dur+ ! taxable 
ye> 7)9 ! mean+ ( section #hf71 ov]     
7ii7 ! am\nt includ$ 9 gross income =   
su* ye> "u section #hf4  4  7c7 ,con=m+ 
am5dm5ts  7#a7 ,section #be;,b ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ qualifi$ retirem5t sav+s ea*   
place x appe>s & ins]t+ qualifi$ sav+s4 
7#b7 ,! head+ ( subsection 7d7 ( section
 #be;,b ( su* ,code is am5d$ by /rik+   
retirem5t4  7#c7 ,subp>agraph 7,a7 (    

section #be;,b7d77#c7 ( su* ,code1 z    
r$esignat$ by subsection 7a71 is am5d$--
 7,a7 by /rik+ p>agraph 7#a7 ! fir/     
place x appe>s & ins]t+ p>agraph 7#a7 or
 7#b71 &  7,b7 by /rik+ p>agraph 7#a7 ! 
second place x appe>s & ins]t+ p>agraph 
7#a71 or 7#b71 z ! case may be14  7#d7  
,! head+ = section #be;,b ( su* ,code is
 am5d$ by /rik+ & ,,ira contributions & 
ins]t+ 1 ,,ira contributions1 & qualifi$
 tuition program contributions4  7#e7 ,!
 table ( sections = subp>t ,a ( "p ,,iv 
( sub*apt] ,a ( *apt] #a ( su* ,code is 
am5d$ by /rik+ ! item relat+ to section 
#be;,b & ins]t+ ! foll[+ new item3 ,sec4
 #be;,b4 ,elective def]rals1 ,,ira      
contributions1 & qualifi$ tuition       
program contributions by c]ta9          
individuals44  7d7 ,effective date ,!   
am5dm5ts made by ?is section %all apply 
to contributions made aft] ,decemb] #ca1
 #bjad1 9 taxable ye>s end+ aft] su*    
date4  #c4 ,exclusion f gross income =  
employ] contributions to qualifi$       
tuition programs  7a7 ,9 g5]al ,"p ,,iii

 ( sub*apt] ,b ( *apt] #a ( ! ,int]nal  
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 aft] section #abg ! foll[+ new section3
  #abg;,a4 ,employ] contributions to    
qualifi$ tuition programs  7a7 ,9 g5]al 
,gross income ( an employee does n      
include am\nts paid by ! employ] z      
contributions to a qualifi$ tuition     
program held by ! employee or sp\se ( ! 
employee if ! contributions are made    
pursuant to a program :i* is describ$ 9 
subsection 7c74  7b7 ,maximum exclusion 
,! am\nt exclud$ f ! gross income ( an  
employee "u ?is section = ! taxable ye> 
%all n exce$ #fjj4  7c7 ,qualifi$       
tuition assi/ance program ,= purposes ( 
?is section1 a qualifi$ tuition         
assi/ance program is a sep>ate writt5   
plan ( an employ] = ! b5efit ( su*      
employ]'s employees-- 7#a7 "u :i* !     
employ] makes mat*+ contributions to    
qualifi$ tuition programs (-- 7,a7 su*  
employees1  7,b7 _! sp\ses1 or  7,c7 any
 individual ) respect to :om su* an     
employee or sp\se-- 7i7 is all[$ a      

d$uction "u section #aea1 &  7ii7 has ! 
p[] to au?orize di/ributions & o!rwise  
adm9i/] su* individual's acc\nt "u !    
qualifi$ tuition program1 &  7#b7 :i*   
meets requirem5ts simil> to !           
requirem5ts ( p>agraphs 7#b71 7#c71     
7#d71 7#e71 & 7#f7 ( section #abg7;b74  
7d7 ,def9itions & special rules ,=      
purposes ( ?is section-- 7#a7 ,qualifi$ 
tuition program ,! t]m qualifi$ tuition 
program means a qualifi$ tuition program
 z def9$ 9 section #ebi7;b74  7#b7      
,employee & employ] ,! t]ms employee &  
employ] %all h ! mean+ giv5 su* t]ms by 
p>agraphs 7#b7 & 7#c71 respectively1 (  
section #abg7;c74  7#c7 ,applicable     
rules ,rules simil> to ! rules (        
p>agraphs 7#d71 7#e71 7#f71 & 7#g7 (    
section #abg7;c7 %all apply4  7e7       
,inflation adju/m5t  7#a7 ,9 g5]al ,9 ! 
case ( any taxable ye> beg9n+ 9 a cal5d>
 ye> aft] #bjae1 ! #fjj am\nt conta9$ 9 
subsection 7b77#a7 %all be increas$ by  
an am\nt equal to-- 7,a7 su* doll>      
am\nt1 multipli$ by  7,b7 ! co/-(-liv+  

adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* ! taxable ye> beg9s1
 det]m9$ by sub/itut+ cal5d> ye> #bjad =
 cal5d> ye> #aiib 9 subp>agraph 7,b7    
!re(4  ,any increase det]m9$ "u ! prec$+
 s5t5ce %all be r\nd$ to ! ne>e/        
multiple ( #ej4  7f7 ,cross ref]5ce ,=  
report+ & recordkeep+ requirem5ts1 see  
section #fjci;,d4  4  7b7 ,exclusion f  
employm5t taxes  7#a7 ,sections         
#caba7;a77#ah71 #ccjf7;b77#ac71 &       
#cdja7;a77#ah7 ( su* ,code are ea* am5d$
 by ins]t+ 1 #abg;,a aft] #abg ea* place
 x appe>s4  7#b7 ,section #cbca7;e77#f7 
( su* ,code is am5d$ by /rik+ section   
#abg & ins]t+ section #abg or #abg;,a4  
7c7 ,report+ & recordkeep+ requirem5ts  
,section #fjci;,d7d77#a7 ( su* ,code is 
am5d$ by ins]t+ 1 #abg;,a aft] #abg4    
7d7 ,o!r con=m+ am5dm5ts  7#a7 ,sections
 #abe7;f71 #dad7n77#c77;,c71 &          
#dad7t77#b7 ( su* ,code are ea* am5d$ by
 ins]t+ 1 #abg;,a aft] #abg ea* place x 
appe>s4  7#b7 ,section #acb7;j77#h7 (   
su* ,code is am5d$ by /rik+ section #abg

 & ins]t+ section #abg or #abg;,a4  7#c7
 ,section #acig7;a77#b77;,a7 ( su* ,code
 is am5d$ by ins]t+ at ! end ! foll[+   
new clause3  7iii7 ,any am\nt paid or   
incurr$ by an employ] :i* is excludable 
f ! gross income ( an employee "u       
section #abg;,a1 b only to ! ext5t paid 
or incurr$ to a p]son n relat$ to !     
employ]4  4  7#d7 ,section #bji7;a77#ae7
 ( ! ,social ,security ,act 7#db        
,u4,s4,c4 #dji7;a77#ae77 is am5d$ by    
/rik+ or #abi & ins]t+ 1 #abg;,a1 or    
#abi4  7e7 ,cl]ical am5dm5t ,! table (  
sections = "p ,,iii ( sub*apt] ,b (     
*apt] #a ( su* ,code is am5d$ by ins]t+ 
aft] ! item relat+ to section #abg !    
foll[+ new item3 ,sec4 #abg;,a4 ,employ]
 contributions to qualifi$ tuition      
programs44  7f7 ,effective date ,!      
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ! date ( !  
enactm5t ( ?is ,act4