Boost Saving for College Act

Summary: Boost Saving for College Act  This bill amends the Internal Revenue Code to modify the tax treatment of qualified tuition programs (known as 529 plans).  The bill allows: (1) a nonrefundable tax credit for contributions of an individual to a 529 plan, and (2) an exclusion from the gross income of an employee of up to $1000 per year of employer contributions to a 529 plan.  The bill also permits savings from a 529 plan to be rolled over tax-free into: (1) a Roth Individual Retirement Account of the owner or the beneficiary of a 529 plan that has been maintained for 10 years, and (2) an ABLE account of the designated beneficiary of the 529 plan.  (Tax-favored ABLE [Achieving a Better Life Experience] accounts are designed to enable individuals with disabilities to save for and pay for disability-related expenses.)

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Boost Saving for College Act''.

SEC. 2. CREDIT FOR CONTRIBUTIONS TO 529 PLANS.

    (a) In General.--Subsection (d) of section 25B of the Internal 
Revenue Code of 1986 (relating to elective deferrals and IRA 
contributions by certain individuals) is amended by redesignating 
paragraph (2) as paragraph (3) and by inserting after paragraph (1) the 
following new paragraph:
            ``(2) Contributions to qualified tuition programs.--
                    ``(A) In general.--The term `qualified savings 
                contribution' includes the amount of any purchase or 
                contribution described in paragraph (1)(A) of section 
                529(b) to a qualified tuition program (as defined in 
                such section) if--
                            ``(i) the taxpayer has the power to 
                        authorize distributions and otherwise 
                        administer the account, and
                            ``(ii) the designated beneficiary of such 
                        purchase or contribution is the taxpayer, the 
                        taxpayer's spouse, or an individual with 
                        respect to whom the taxpayer is allowed a 
                        deduction under section 151.
                    ``(B) Limitation based on compensation.--The amount 
                treated as a qualified savings contribution by reason 
                of subparagraph (A) for any taxable year shall not 
                exceed the sum of--
                            ``(i) the compensation (as defined in 
                        section 219(f)(1)) includible in the taxpayer's 
                        gross income for the taxable year, and
                            ``(ii) the amount excluded from the 
                        taxpayer's gross income under section 112 
                        (relating to combat pay) for such year.
                    ``(C) Determination of adjusted gross income.--
                Solely for purposes of determining the applicable 
                percentage under subsection (b) which applies with 
                respect to the amount treated as a qualified savings 
                contribution by reason of subparagraph (A), adjusted 
                gross income (determined without regard to this 
                subparagraph) shall be increased by the excess (if any) 
                of--
                            ``(i) the social security benefits received 
                        during the taxable year (within the meaning of 
                        section 86), over
                            ``(ii) the amount included in gross income 
                        for such year under section 86.''.
    (b) Conforming Amendments.--
            (1) Section 25B of such Code is amended by striking 
        ``qualified retirement savings'' each place it appears in the 
        text and inserting ``qualified savings''.
            (2) The subsection heading for section 25B(d) of such Code 
        is amended by striking ``Retirement''.
            (3) Subparagraph (A) of section 25B(d)(3) of such Code, as 
        redesignated by subsection (a), is amended--
                    (A) by striking ``paragraph (1)'' the first place 
                it appears and inserting ``paragraph (1) or (2)'', and
                    (B) by striking ``paragraph (1)'' the second place 
                it appears and inserting ``paragraph (1), or (2), as 
                the case may be,''.
            (4) The heading for section 25B of such Code is amended by 
        striking ``and ira contributions'' and inserting ``, ira 
        contributions, and qualified tuition program contributions''.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 25B and inserting the following 
        new item:

``Sec. 25B. Elective deferrals, IRA contributions, and qualified 
                            tuition program contributions by certain 
                            individuals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made after December 31, 2017, in taxable years 
ending after such date.

SEC. 3. EXCLUSION FROM GROSS INCOME FOR EMPLOYER CONTRIBUTIONS TO 
              QUALIFIED TUITION PROGRAMS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 127 the 
following new section:

``SEC. 127A. EMPLOYER CONTRIBUTIONS TO QUALIFIED TUITION PROGRAMS.

    ``(a) In General.--Gross income of an employee does not include 
amounts paid by the employer as contributions to a qualified tuition 
program held by the employee or spouse of the employee if the 
contributions are made pursuant to a program which is described in 
subsection (c).
    ``(b) Maximum Exclusion.--
            ``(1) In general.--The amount excluded from the gross 
        income of an employee under this section for the taxable year 
        shall not exceed $1,000.
            ``(2) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2018, the $1,000 
                amount contained in paragraph (1) shall be increased by 
                an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2017' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
                    ``(B) Rounding.--Any increase determined under 
                subparagraph (A) shall be rounded to the nearest 
                multiple of $50.
    ``(c) Qualified Tuition Assistance Program.--For purposes of this 
section, a qualified tuition assistance program is a separate written 
plan of an employer for the benefit of such employer's employees--
            ``(1) under which the employer makes matching contributions 
        to qualified tuition programs of--
                    ``(A) such employees,
                    ``(B) their spouses, or
                    ``(C) any individual with respect to whom such an 
                employee or spouse--
                            ``(i) is allowed a deduction under section 
                        151, and
                            ``(ii) has the power to authorize 
                        distributions and otherwise administer such 
                        individual's account under the qualified 
                        tuition program, and
            ``(2) which meets requirements similar to the requirements 
        of paragraphs (2), (3), (4), (5), and (6) of section 127(b).
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified tuition program.--The term `qualified 
        tuition program' means a qualified tuition program as defined 
        in section 529(b).
            ``(2) Employee and employer.--The terms `employee' and 
        `employer' shall have the meaning given such terms by 
        paragraphs (2) and (3), respectively, of section 127(c).
            ``(3) Applicable rules.--Rules similar to the rules of 
        paragraphs (4), (5), (6), and (7) of section 127(c) shall 
        apply.
    ``(e) Cross Reference.--For reporting and recordkeeping 
requirements, see section 6039D.''.
    (b) Exclusion From Employment Taxes.--
            (1) Sections 3121(a)(18), 3306(b)(13), and 3401(a)(18) of 
        such Code are each amended by inserting ``127A,'' after 
        ``127,'' each place it appears.
            (2) Section 3231(e)(6) of such Code is amended by striking 
        ``section 127'' and inserting ``section 127 or 127A''.
    (c) Reporting and Recordkeeping Requirements.--Section 6039D(d)(1) 
of such Code is amended by inserting ``127A,'' after ``127,''.
    (d) Other Conforming Amendments.--
            (1) Sections 125(f), 414(n)(3)(C), and 414(t)(2) of such 
        Code are each amended by inserting ``127A,'' after ``127,'' 
        each place it appears.
            (2) Section 132(j)(8) of such Code is amended by striking 
        ``section 127'' and inserting ``section 127 or 127A''.
            (3) Section 221(d)(2)(A) of such Code is amended by 
        inserting ``127A,'' after ``127''.
            (4) Section 1397(a)(2)(A) of such Code is amended by 
        inserting at the end the following new clause:
                            ``(iii) Any amount paid or incurred by an 
                        employer which is excludable from the gross 
                        income of an employee under section 127A, but 
                        only to the extent paid or incurred to a person 
                        not related to the employer.''.
            (5) Section 209(a)(15) of the Social Security Act (42 
        U.S.C. 409(a)(15)) is amended by striking ``or 129'' and 
        inserting ``, 127A, or 129''.
    (e) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 127 the following new item:

``Sec. 127A. Employer contributions to qualified tuition programs.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 4. SPECIAL ROLLOVER TO ROTH IRA FROM LONG-TERM QUALIFIED TUITION 
              PROGRAM.

    (a) In General.--Paragraph (3) of section 529(c) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(E) Special rollover to roth ira from long-term 
                qualified tuition program.--For purposes of this 
                section--
                            ``(i) In general.--In the case of a 
                        distribution from a qualified tuition program 
                        which has been maintained by an account owner 
                        for the 10-year period ending on the date of 
                        such distribution--
                                    ``(I) subparagraph (A) shall not 
                                apply to any portion of such 
                                distribution which, not later than 60 
                                days after such distribution, is paid 
                                into a Roth IRA maintained for the 
                                benefit of such account owner or the 
                                designated beneficiary under such 
                                qualified tuition program, and
                                    ``(II) such portion shall be 
                                treated as a rollover contribution for 
                                purposes of section 408A(e).
                            ``(ii) Limitation.--Clause (i) shall only 
                        apply to so much of any distribution as does 
                        not exceed the lesser of--
                                    ``(I) the amount applicable to the 
                                account owner under section 408A(c)(2) 
                                for the taxable year, or
                                    ``(II) the aggregate amount 
                                contributed to the program (and 
                                earnings attributable thereto) before 
                                the 5-year period ending on the date of 
                                the distribution.''.
    (b) Qualified Rollover Contribution.--Paragraph (1) of section 
408A(e) of such Code is amended by striking the period at the end of 
subparagraph (B) and inserting ``, and'' and by inserting after 
subparagraph (B) the following new subparagraph:
                    ``(C) from a qualified tuition program to the 
                extent provided in section 529(c)(3)(E).''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to distributions after December 31, 2017.

SEC. 5. ROLLOVERS TO ABLE PROGRAMS FROM 529 PROGRAMS.

    (a) In General.--Clause (i) of section 529(c)(3)(C) of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
subclause (I), by striking the period at the end of subclause (II) and 
inserting ``, or'', and by adding at the end the following:
                                    ``(III) to an ABLE account (as 
                                defined in section 529A(e)(6)) of the 
                                designated beneficiary.
                        Subclause (III) shall not apply to so much of a 
                        distribution which, when added to all other 
                        contributions made to the ABLE account for the 
                        taxable year, exceeds the limitation under 
                        section 529A(b)(2)(B).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to distributions after the date of the enactment of this Act.