,,ii #aafth ,,congress #ast ,session ,s4 #bifb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #b1 #bjai,mr4 ,paul introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to permit withdrawals from certain retirement plans for repayment of student loan debt1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,higher ,education ,loan ,payment and ,enhanced ,retirement ,act of #bjai or the ,,helper ,act of #bjai4 #b4 ,withdrawals for higher education expenses 7a7 #dja7k7 plans ,paragraph 7#ad7 of section #dja7k7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,c7 ,distributions for qualified higher education expenses 7i7 ,in general ,a distribution shall be treated as made upon hardship of the employee to the extent that the aggregate amount of such distributions during the taxable year does not exceed the lesser of-- 7,i7 the amount paid by the taxpayer for qualified higher education expenses during such taxable year1 or 7,,ii7 #e1bej4 7ii7 ,distribution must be otherwise disallowed ,clause 7i7 shall not apply to any distribution which is permissible under paragraph 7#b77;,b77i7 7including distributions which would be treated as made upon hardship of the employee without regard to this subparagraph74 7iii7 ,no requirement to demonstrate hardship ,clause 7i7 shall apply without regard to any requirement to demonstrate financial need or hardship1 or to demonstrate that other assets are not available to pay the qualified higher education expenses4 7iv7 ,additional tax under section #gb7t7 not to apply ,no tax shall be imposed under section #gb7t7 on any amount treated as a hardship distribution by reason of clause 7i74 7v7 ,qualified higher education expenses ,for purposes of this subparagraph1 the term qualified higher education expenses has the meaning given such term by section #gb7t77#g74 4 7b7 #djc7;b7 plans ,paragraph 7#aa7 of section #djc7;b7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 ,under rules similar to the rules of section #dja7k77#ad77;,c71 a distribution shall be treated as made upon hardship of the employee to the extent that the aggregate amount of such distributions during the taxable year does not exceed the lesser of the amount paid by the taxpayer for qualified higher education expenses during such taxable year1 or #e1bej44 7c7 #deg plans ,paragraph 7#a7 of section #deg7;d7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 ,under rules similar to the rules of section #dja7k77#ad77;,c7 7and without regard to whether the expenses are unforeseen71 a distribution shall be treated as made by reason of unforeseen emergency to the extent that the aggregate amount of such distributions during the taxable year does not exceed the lesser of the amount paid by the taxpayer for qualified higher education expenses during such taxable year1 or #e1bej44 7d7 ,effective date ,the amendment made by this section shall apply to distributions made after ,december #ca1 #bjai4 #c4 ,penalty-free withdrawals from ,i,r,as for student loan expenses 7a7 ,in general ,paragraph 7#g7 of section #gb7t7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,c7 ,student loans ,such term shall include amounts paid in repayment of any loan made to an individual described in subparagraph 7,a7 to assist the individual in attending an educational organization described in section #agj7;b77#a77;,a77ii74 4 7b7 ,effective date ,the amendment made by this section shall apply to distributions made after ,december #ca1 #bjai4 #d4 ,exclusion of distributions for educational expenses 7a7 ,in general ,section #djb of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7m7 ,distributions for qualified higher education expenses 7#a7 ,in general ,gross income for the taxable year does not include-- 7,a7 any distribution from a qualified cash or deferred arrangement 7as defined in section #dja7k77#b771 an annuity contract described in section #djc7;b71 or an eligible deferred compensation plan described in section #deg7;b7 which is maintained by an eligible employer described in section #deg7;e77#a77;,a71 which is treated as made upon hardship of the employee by reason of section #dja7k77#ad77;,c71 the last sentence of section #djc7;b77#aa71 or the last sentence of section #deg7;d77#a71 or 7,b7 any distribution from an individual retirement account 7as defined in section #djh7;a77 to which section #gb7t77#b77;,e7 applies4 7#b7 ,distributions must otherwise be includible 7,a7 ,in general ,an amount shall be treated as described in paragraph 7#a7 only to the extent that such amount would be includible in gross income without regard to such paragraph4 7,b7 ,application of section #gb ,in determining whether a distribution would be includible in gross income but for this subsection1 rules similar to the rules of subsection 7l77#c77;,b7 shall apply 7by taking into account all retirement plans in which the taxpayer is a participant74 4 7b7 ,coordination with deductions and credits 7#a7 ,coordination with ,american ,opportunity and ,lifetime ,learning credits 7,a7 ,in general ,paragraph 7#b7 of section #be;,a7g7 of the ,internal ,revenue ,code of #aihf is amended by redesignating subparagraph 7,c7 as subparagraph 7,d71 by striking and at the end of subparagraph 7,b71 and by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 a distribution from a qualified cash or deferred arrangement 7as defined in section #dja7k77#b771 an annuity contract described in section #djc7;b71 an eligible deferred compensation plan described in section #deg7;b7 which is maintained by an eligible employer described in section #deg7;e77#a77;,a71 or an individual retirement account 7as defined in section #djh7;a77 which is excluded from gross income of the distributee under section #djb7m7 7other than any portion of such a distribution which is attributable to the repayment of a loan described in section #gb7t77#g77;,c771 and 4 7,b7 ,coordination with waiver of penalty ,subparagraph 7,b7 of section #gb7t77#g7 is amended by inserting 7without regard to subparagraph 7,c7 thereof7 before the period4 7#b7 ,deduction for interest on education loans ,paragraph 7#a7 of section #bba7;e7 of such ,code is amended by inserting before the period at the end the following3 1 or for any amount paid with a distribution which is excluded from gross income under section #djb7m74 7c7 ,effective date ,the amendment made by this section shall apply to distributions made after ,december #ca1 #bjai4 #e4 ,inclusion of employer student loan payments in educational assistance programs 7a7 ,in general ,paragraph 7#a7 of section #abg7;c7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking and at the end of subparagraph 7,a72 7#b7 by adding and at the end of subparagraph 7,b72 and 7#c7 by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 the payment1 by an employer1 of amounts in repayment of any loan made to the employee to assist the employee in attending an educational organization described in section #agj7;b77#a77;,a77ii71 4 7b7 ,denial of double benefit ,paragraph 7#a7 of section #bba7;e7 of the ,internal ,revenue ,code of #aihf1 as amended by section #d1 is further amended by inserting which is excluded from gross income under section #abg or is after or for any amount4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4 #f4 ,repeal of cap on deduction for interest on education loans 7a7 ,in general ,section #bba of the ,internal ,revenue ,code of #aihf is amended by striking subsections 7b7 and 7f74 7b7 ,carryover of excess interest ,section #bba of the ,internal ,revenue ,code of #aihf1 as so amended1 is amended by inserting after subsection 7a7 the following new subsection3 7b7 ,carryover ,if the amount of the deduction allowable under subsection 7a7 exceeds the taxable income of the taxpayer for the taxable year 7determined without regard to this section71 then an amount equal to such excess shall be treated as interest paid by the taxpayer in the succeeding taxable year on a qualified education loan4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #g4 ,employer ,roth contributions 7a7 ,in general ,subsection 7a7 of section #djb;,a of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking and at the end of paragraph 7#a72 7#b7 by redesignating paragraph 7#b7 as paragraph 7#c72 and 7#c7 by inserting after paragraph 7#a7 the following new paragraph3 7#b7 in the case of a qualified cash or deferred arrangement 7as defined in section #dja7k77#b771 any designated ,roth employer contribution made pursuant to the arrangement shall be treated for purposes of this chapter in the same manner as contributions described in section #dja7k77#c77;,d77ii71 except that such contribution shall not be excludable from gross income1 and 4 7b7 ,conforming amendments 7#a7 ,paragraph 7#a7 of section #djb;,a7b7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by striking may elect to make and inserting 8may elect-- 7,a7 to make 2 7,b7 by striking the period at the end and inserting 1 and2 and 7,c7 by adding at the end the following new subparagraph3 7,b7 in the case of a qualified cash or deferred arrangement 7as defined in section #dja7k77#b771 to have the employee's employer make designated ,roth employer contributions in lieu of all or a portion of the matching or nonelective contributions the employee is otherwise eligible to receive under the arrangement4 4 7#b7 ,paragraph 7#b77;,a7 of section #djb;,a7b7 of such ,code is amended by striking of each employee and inserting and designated ,roth employer contributions with respect to each employee4 7#c7 ,subparagraph 7,b7 of section #djb;,a7d77#b7 of such ,code is amended by inserting 1 or elected to have made a designated ,roth employer contribution1 after designated ,roth contribution both places it appears in clauses 7i7 and 7ii74 7c7 ,designated ,roth employer contribution ,subsection 7c7 of section #djb;,a of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by inserting and designated ,roth employer contributions after designated ,roth contributions in the heading2 and 7#b7 by adding at the end the following new paragraph3 7#e7 ,designated ,roth employer contribution 7,a7 ,in general ,the term designated ,roth employer contribution means any contribution described in subparagraph 7,b7 made under a qualified cash or deferred arrangement 7as defined in section #dja7k77#b77 which-- 7i7 is excludable from gross income of an employee without regard to this section1 and 7ii7 the employee designates 7at such time and in such manner as the ,secretary may prescribe7 as not being so excludable4 7,b7 ,contributions described ,the contributions described in this subparagraph are-- 7i7 matching contributions 7as defined in section #dja7m77#d77;,a77 which meet the requirements of subparagraphs 7,b7 and 7,c7 of section #dja7k77#b71 and 7ii7 qualified nonelective contributions 7within the meaning of section #dja7m77#d77;,c774 7,c7 ,designation limits ,the amount of matching contributions and qualified nonelective contributions which an employee may designate under subparagraph 7,a7 shall not exceed the excess 7if any7 of-- 7i7 the maximum amount of such contributions excludable from gross income of the employee for the taxable year 7without regard to this section71 over 7ii7 the aggregate amount of such contributions with respect to the employee for the taxable year which the employee does not designate under subparagraph 7,a74 4 7d7 ,effective date ,the amendments made by this section shall apply to contributions made in taxable years beginning after ,december #ca1 #bjai4 #h4 ,maximum contributions 7a7 ,elective deferrals 7#a7 ,in general ,subparagraph 7,b7 of section #djb7;g77#a7 of the ,internal ,revenue ,code of #aihf is amended by striking #ae1jjj and inserting #be1jjj4 7#b7 ,cost-of-living adjustment ,paragraph 7#d7 of section #djb7;g7 of such ,code is amended-- 7,a7 by striking #ae1jjj and inserting #be1jjj2 7,b7 by striking ,december #ca1 #bjjf and inserting ,december #ca1 #bjbj2 and 7,c7 by striking ,july #a1 #bjje and inserting ,july #a1 #bjai4 7#c7 ,conforming amendment ,clause 7ii7 of section #djb7;g77#g77;,a7 of such ,code is amended by striking #ae1jjj and inserting #be1jjj4 7b7 #deg plans 7#a7 ,in general ,subparagraph 7,a7 of section #deg7;e77#ae7 of the ,internal ,revenue ,code of #aihf is amended by striking #ae1jjj and inserting #be1jjj4 7#b7 ,cost-of-living adjustment ,subparagraph 7,b7 of section #deg7;e77#ae7 of such ,code is amended-- 7,a7 by striking #ae1jjj and inserting #be1jjj2 7,b7 by striking ,december #ca1 #bjjf and inserting ,december #ca1 #bjbj2 and 7,c7 by striking ,july #a1 #bjje and inserting ,july #a1 #bjai4 7c7 ,employed individual #dja7k7s ,subsection 7k7 of section #dja of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ae7 ,employed individual arrangement 7,a7 ,in general ,a cash or deferred arrangement shall not be treated as failing to meet any requirement of this subsection solely because1 under the arrangement1 an employee may elect to make additional elective deferrals which are not subject to1 and are not taken into account under1 paragraph 7#c7 to a separate account from other contributions made on behalf of the employee under the arrangement1 if-- 7i7 all employees eligible to participate in the arrangement are eligible to make such election1 7ii7 the aggregate of all elective deferrals made by the employee under the arrangement does not exceed the limitation of section #djb7;g71 and 7iii7 no matching or nonelective contributions may be made to such account or with respect to elective deferrals contributed to such account4 7,b7 ,distribution1 etc4 rules to apply ,the rules of this subsection1 other than paragraph 7#c71 shall apply to any account established under subparagraph 7,a74 7,c7 ,elective deferral ,for purposes of this paragraph1 the term elective deferral means any employer contribution under a qualified cash or deferred arrangement to the extent not includible in gross income for the taxable year under section #djb7;e77#c7 7determined without regard to section #djb7;g774 4 7d7 ,effective date ,the amendments made by this section shall apply to contributions made in taxable years beginning after ,december #ca1 #bjai4