H.R. 5030

College Savings Flexibility Act of 2010

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I

111th CONGRESS

2d Session

H. R. 5030

IN THE HOUSE OF REPRESENTATIVES

April 15, 2010

Ms. Bean (for herself, Mr. Kind, Mrs. Halvorson, Ms. Markey of Colorado, and Mr. Nye) 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 allow distributions from 529 plans for the payment of student loans.

1.

Short title

This Act may be cited as the College Savings Flexibility Act of 2010.

2.

529 plan distribution for student loan payments

(a)

In general

Paragraph (3) of section 529(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(C)

Temporary rule for student loans

For purposes of this paragraph, any interest or principal paid after December 31, 2009, and before January 1, 2015, with respect to a qualified education loan (as defined in section 221) with respect to a designated beneficiary shall be treated as a qualified higher education expense.

.

(b)

Conforming amendments

(1)

Subparagraph (A) of section 72(t)(7) of such Code is amended by inserting determined without regard to subparagraph (C) thereof after section 529(e)(3).

(2)

Clause (i) of section 530(b)(2)(A) of such Code is amended by inserting determined without regard to subparagraph (C) thereof after section 529(e)(3).

(c)

Effective date

The amendments made by this section shall apply to distributions made after December 31, 2009.