,i #aaeth ,,congress #ast ,session ,h4 ,r4 #cjdf ,,in ,,the ,,house ,,of ,,representatives ,june #bc1 #bjag,mr4 ,poliquin 7for himself1 ,mr4 ,o',halleran1 ,mr4 ,sensenbrenner1 and ,mr4 ,rodney ,davis of ,illinois7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to exclude employer contributions to #ebi plans from gross income and employment taxes and to allow a deduction for individual contributions to such plans4 #a4 ,short title ,this ,act may be cited as the ,help ,all ,americans ,save for ,college ,act of #bjag4 #b4 ,tax treatment of contributions to #ebi plans 7a7 ,exclusion from gross income for employer contributions 7#a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #aci;,f the following new section3 #aci;,g4 ,employer contributions to #ebi plan or ,,able account 7a7 ,in general ,in the case of an individual who is a qualified account owner1 gross income shall not include the amount of any contribution to such account during the taxable year by the employer of the account owner4 7b7 ,limitation ,the amount exempt from gross income by subsection 7a7 for a taxable year shall not exceed the lesser of-- 7#a7 an amount equal to the compensation includible in the individual's gross income for such taxable year1 or 7#b7 #e1jjj 7#aj1jjj in the case of a joint return7 for each dependent who of the taxpayer is the designated beneficiary of an account under section #ebi4 7c7 ,qualified account owner ,for purposes of this section1 the term qualified account owner means-- 7#a7 in the case of an account in connection with a qualified tuition program1 the account owner of an account of a designated beneficiary under section #ebi1 and 7#b7 in the case of an ,,able account1 the designated beneficiary in connection with the ,,able account under section #ebi;,a7e77#c74 4 7#b7 ,cafeteria plan does not include employer contributions to #ebi plans or ,,able accounts ,section #abe7;d77#b7 of such ,code is amended by adding at the end the following3 7,e7 ,exception for contributions to #ebi plan and ,,able accounts ,subparagraph 7,a7 shall not apply to a plan to the extent of amounts which a covered employee may elect to have the employer pay as contributions to an account under section #ebi or #ebi;,a4 4 7#c7 ,clerical amendment ,the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by inserting after the item relating to section #aci;,f the following new item3 ,sec4 #aci;,g4 ,employer contributions to #ebi plan or ,,able account4 4 7b7 ,federal insurance contributions 7#a7 ,wages ,section #caba7;a7 of such ,code is amended by striking or at the end of paragraph 7#bb71 by striking the period at the end of paragraph 7#bc7 and inserting 2 or1 and by inserting after paragraph 7#bc7 the following3 7#bd7 the amount of any contribution made to or on behalf of an employee if at the time of such contribution it is reasonable to believe that the employee will be able to exclude such contribution from income under section #aci;,g4 4 7#b7 ,net earnings from self-employment ,section #adjb7;a7 of such ,code is amended by striking and at the end of paragraph 7#af71 by striking the period at the end of paragraph 7#ag7 and inserting 2 and1 and inserting after paragraph 7#ag7 the following3 7#ah7 there shall be excluded any contribution made to or on behalf of an employee that is not includible in gross income of the employee under section #aci;,g4 4 7#c7 ,conforming amendments to ,social ,security ,act 7,a7 ,wages ,section #bji7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #dji7;a77 is amended by striking or at the end of paragraph 7#ai7 and inserting a semicolon1 by striking the period at the end of paragraph 7#bj7 and inserting 2 or1 and by inserting after paragraph 7#bj7 the following3 7#ba7 ,the amount of any contribution made to or on behalf of an employee that is not includible in gross income of the employee under section #aci;,g of the ,internal ,revenue ,code of #aihf4 4 7,b7 ,net earnings from self-employment ,section #baa7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #daa7;a77 is amended by striking and at the end of paragraph 7#ae71 by striking the period at the end of paragraph 7#af7 and inserting 2 and1 and inserting after paragraph 7#af7 the following3 7#ag7 ,there shall be excluded any contribution made to or on behalf of an employee that is not includible in gross income of the employee under section #aci;,g of the ,internal ,revenue ,code of #aihf4 4 7c7 ,railroad retirement ,section #cbca7;e7 of such ,code is amended by adding at the end the following3 7#ac7 ,employer contributions to #ebi plan or ,,able account ,the term compensation shall not include any contribution made to or on behalf of an employee that is not includible in gross income of the employee under section #aci;,g4 4 7d7 ,deduction for individual contributions 7#a7 ,in general ,part ,,vii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by redesignating section #bbd as section #bbe and by inserting after section #bbc the following new section3 #bbd4 ,contributions to #ebi plans and ,,able accounts 7a7 ,allowance of deduction ,in the case of an individual1 there shall be allowed as a deduction for the taxable year an amount equal to the sum of-- 7#a7 the aggregate contributions made by such individual to qualified tuition programs 7as defined in section #ebi7 during such taxable year1 and 7#b7 the aggregate contributions made by such individual to ,,able accounts 7as defined in section #ebi;,a7 during such taxable year4 7b7 ,limitation ,the amount allowed as a deduction by subsection 7a7 for a taxable year shall not exceed #e1jjj4 4 7#b7 ,clerical amendment ,the table of sections for part ,,vii of subchapter ,b of chapter #a of such ,code is amended by redesignating the item relating to section #bbd as an item relating to section #bbe and by inserting after the item relating to section #bbc the following new item3 ,sec4 #bbd4 ,contributions to #ebi plans and ,,able accounts4 4 7e7 ,effective date ,the amendments made by this section shall apply to contributions made during taxable years beginning after the date of the enactment of this ,act4 #c4 ,additional tax for distributions not used for qualified purposes 7a7 ,qualified tuition programs 7#a7 ,in general ,the first sentence of section #ebi7;c77#f7 of the ,internal ,revenue ,code of #aihf is amended by striking the period at the end and inserting 1 except that the rate of such tax shall be determined under subparagraph 7,b7 of this paragraph44 7#b7 ,rate ,paragraph 7#f7 of section #ebi7;c7 of such ,code1 as amended by subsection 7a71 is amended-- 7,a7 by striking ,the tax and inserting 7,a7 ,in general ,the tax 1 and 7,b7 by adding at the end the following3 7,b7 ,rate ,for purposes of subparagraph 7,a71 the tax rate determined under this subparagraph is the greater of-- 7i7 #aj percent1 and 7ii7 the highest rate of income tax applicable to such person under this title4 4 7b7 ,qualified ,,able programs 7#a7 ,in general ,subparagraph 7,a7 of section #ebi;,a7c77#c7 of the ,internal ,revenue ,code of #aihf is amended by striking #aj percent and inserting the applicable percentage4 7#b7 ,applicable percentage ,paragraph 7#c7 of section #ebi;,a7c7 of such ,code is amended by adding at the end the following3 7,d7 ,applicable percentage ,for purposes of this paragraph1 the term applicable percentage means the greater of-- 7i7 #aj percent1 and 7ii7 the highest rate of income tax applicable to such person under this title4 4 7c7 ,effective date ,the amendments made by this section shall apply to distributions made during taxable years beginning after the date of the enactment of this ,act4