I 

111TH CONGRESS 

1ST SESSION H. R. 1351 

To amend the Internal Revenue Code of 1986 to treat computer technology 

and equipment as eligible higher education expenses for 529 plans, to 

allow certain individuals a credit against income tax for contributions 

to 529 plans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 5, 2009 

Mr. POMEROY (for himself, Mr. TIBERI, Mr. MEEK of Florida, Mr. KIND, and 

Ms. JENKINS) 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 treat computer technology and equipment as eligible higher education expenses for 529 plans, to allow certain individuals 

a credit against income tax for contributions to 529 

plans, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Savings Enhancement 

5 for Education in College Act’’. 


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1 SEC. 2. COMPUTER TECHNOLOGY AND EQUIPMENT AL2 LOWED AS A QUALIFIED HIGHER EDUCATION 

3 EXPENSE FOR SECTION 529 ACCOUNTS. 

4 (a) IN GENERAL.—Section 529(e)(3)(A) of the Inter5 nal Revenue Code of 1986 is amended by striking ‘‘and’’ 

6 at the end of clause (i), by striking the period at the end 

7 of clause (ii), and by adding at the end the following: 

8 ‘‘(iii) expenses paid or incurred for 

9 the purchase of any computer technology 

10 or equipment (as defined in section 

11 170(e)(6)(F)(i)) or Internet access and re12 lated services, if such technology, equip13 ment, or services are to be used primarily 

14 by the designated beneficiary while enrolled 

15 at an eligible educational institution. 

16 Clause (iii) shall not include expenses for com17 puter software designed for sports, games, or 

18 hobbies unless the software is predominantly 

19 educational in nature.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to expenses paid or incurred after 

22 December 31, 2010. 

23 SEC. 3. CREDIT FOR CONTRIBUTIONS TO 529 PLANS. 

24 (a) IN GENERAL.—Subsection (d) of section 25B of 

25 the Internal Revenue Code of 1986 (relating to elective 

26 deferrals and IRA contributions by certain individuals) is 


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1 amended by redesignating paragraph (2) as paragraph (3) 

2 and by inserting after paragraph (1) the following new 

3 paragraph: 

4 ‘‘(2) CONTRIBUTIONS TO QUALIFIED TUITION

5 PROGRAMS.— 

6 ‘‘(A) IN GENERAL.—The term ‘qualified 

7 savings contribution’ includes the amount of 

8 any purchase or contribution described in para9 graph (1)(A) of section 529(b) to a qualified 

10 tuition program (as defined in such section) 

11 if— 

12 ‘‘(i) the taxpayer has the power to au13 thorize distributions and otherwise admin14 ister the account, and 

15 ‘‘(ii) the designated beneficiary of 

16 such purchase or contribution is the tax17 payer, the taxpayer’s spouse, or an indi18 vidual with respect to whom the taxpayer 

19 is allowed a deduction under section 151. 

20 ‘‘(B) LIMITATION BASED ON COMPENSA21 TION.—The amount treated as a qualified sav22 ings contribution by reason of subparagraph 

23 (A) for any taxable year shall not exceed the 

24 sum of— 


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1 ‘‘(i) the compensation (as defined in 

2 section 219(f)(1)) includible in the tax3 payer’s gross income for the taxable year, 

4 and 

5 ‘‘(ii) the amount excluded from the 

6 taxpayer’s gross income under section 112 

7 (relating to combat pay) for such year. 

8 ‘‘(C) DETERMINATION OF ADJUSTED

9 GROSS INCOME.—Solely for purposes of deter10 mining the applicable percentage under sub11 section (b) which applies with respect to the 

12 amount treated as a qualified savings contribu13 tion by reason of subparagraph (A), adjusted 

14 gross income (determined without regard to this 

15 subparagraph) shall be increased by the excess 

16 (if any) of— 

17 ‘‘(i) the social security benefits re18 ceived during the taxable year (within the 

19 meaning of section 86), over 

20 ‘‘(ii) the amount included in gross in21 come for such year under section 86.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Section 25B of such Code is amended by 

24 striking ‘‘qualified retirement savings’’ each place it 


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1 appears in the text and inserting ‘‘qualified sav2 ings’’. 

3 (2) The subsection heading for section 25B(d) 

4 of such Code is amended by striking ‘‘RETIRE5 MENT’’. 

6 (3) Subparagraph (A) of section 25B(d)(3) of 

7 such Code, as redesignated by subsection (a), is 

8 amended— 

9 (A) by striking ‘‘paragraph (1)’’ the first 

10 place it appears and inserting ‘‘paragraph (1) 

11 or (2)’’, and 

12 (B) by striking ‘‘paragraph (1)’’ the sec13 ond place it appears and inserting ‘‘paragraph 

14 (1), or (2), as the case may be,’’. 

15 (4) The heading for section 25B of such Code 

16 is amended by striking ‘‘AND IRA CONTRIBU17 TIONS’’ and inserting ‘‘, IRA CONTRIBUTIONS, 

18 AND QUALIFIED TUITION PROGRAM CONTRIBU19 TIONS’’. 

20 (5) The table of sections for subpart A of part 

21 IV of subchapter A of chapter 1 of such Code is 

22 amended by striking the item relating to section 25B 

23 and inserting the following new item: 

‘‘Sec. 25B. Elective deferrals, IRA contributions, and qualified tuition program 

contributions by certain individuals.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to contributions made after De3 cember 31, 2009. 

4 SEC. 4. INVESTMENT DIRECTION UNDER QUALIFIED TUI5 TION PROGRAMS. 

6 (a) IN GENERAL.—Paragraph (4) of section 529(b) 

7 of the Internal Revenue Code of 1986 (relating to invest8 ment direction) is amended by striking the period at the 

9 end and inserting ‘‘more frequently than 2 times per cal10 endar year.’’. 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to years beginning after December 

13 31, 2008. 

Æ 


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