II

106TH CONGRESS

1ST SESSION S. 474

To amend the Internal Revenue Code of 1986 to provide a deduction for

contributions to education individual retirement accounts, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 25, 1999

Mr. SCHUMER introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide

a deduction for contributions to education individual retirement accounts, 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 ‘‘Save for College Act

5 of 1999’’.

6 SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO EDUCATION

7 INDIVIDUAL RETIREMENT ACCOUNTS.

8 (a) IN GENERAL.—Part VII of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 (relating to
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1 additional itemized deductions for individuals) is amended

2 by redesignating section 222 as section 223 and by insert3 ing after section 221 the following new section:

4 ‘‘SEC. 222. EDUCATION INDIVIDUAL RETIREMENT AC5 COUNTS.

6 ‘‘In the case of an individual, there shall be allowed

7 as a deduction the amount paid in cash during the taxable

8 year by such individual to an education individual retire9 ment account under section 530.’’

10 (b) DEDUCTION ALLOWED IN ARRIVING AT AD11 JUSTED GROSS INCOME.—Paragraph (7) of section 62(a)

12 of such Code (relating to retirement savings) is

13 amended—

14 (1) by inserting ‘‘OR EDUCATION’’ after ‘‘RE15 TIREMENT’’ in the heading of such paragraph, and

16 (2) by inserting before the period at the end the

17 following: ‘‘and the deduction allowed by section 222

18 (relating to education individual retirement ac19 counts)’’.

20 (c) MODIFICATIONS TO EDUCATION INDIVIDUAL RE21 TIREMENT ACCOUNTS.—

22 (1) INCREASE IN CONTRIBUTION LIMIT.—Sec23 tion 530(b)(1)(A)(iii) of such Code (defining edu24 cation individual retirement account) is amended by

25 striking ‘‘$500’’ and inserting ‘‘$2,000’’.
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1 (2) INCREASE IN AGI LIMITS.—Section

2 530(c)(1) of such Code (relating to reduction in per3 mitted contributions based on adjusted gross in4 come) is amended—

5 (A) by striking ‘‘$95,000 ($150,000’’ in

6 subparagraph (A)(ii) and inserting ‘‘$100,000

7 ($140,000’’, and

8 (B) by striking subparagraph (B) and in9 serting the following new subparagraph:

10 ‘‘(B) $20,000.’’

11 (3) INFLATION ADJUSTMENTS.—Section 530 of

12 such Code is amended by adding at the end the fol13 lowing new subsection:

14 ‘‘(i) INFLATION ADJUSTMENTS.—

15 ‘‘(1) DOLLAR LIMITATION ON AMOUNT OF CON16 TRIBUTION.—

17 ‘‘(A) IN GENERAL.—In the case of a tax18 able year beginning after 1999, the $2,000

19 amount under subsection (b)(1)(A)(iii) shall be

20 increased by an amount equal to—

21 ‘‘(i) such dollar amount, multiplied by

22 ‘‘(ii) the cost-of-living adjustment de23 termined under section 1(f)(3) for the cal24 endar year in which the taxable year be25 gins, determined by substituting ‘calendar
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1 year 1998’ for ‘calendar year 1992’ in sub2 paragraph (B) thereof.

3 ‘‘(B) ROUNDING.—If any amount as ad4 justed under subparagraph (A) is not a multiple

5 of $100, such amount shall be rounded to the

6 next lowest multiple of $100.

7 ‘‘(2) INCOME LIMITS.—

8 ‘‘(A) IN GENERAL.—In the case of a tax9 able year beginning after 1999, the $100,000

10 and $140,000 amounts under subsection

11 (c)(1)(A)(ii) shall each be increased by an

12 amount equal to—

13 ‘‘(i) such dollar amount, multiplied by

14 ‘‘(ii) the cost-of-living adjustment de15 termined under section 1(f)(3) for the cal16 endar year in which the taxable year be17 gins, determined by substituting ‘calendar

18 year 1998’ for ‘calendar year 1992’ in sub19 paragraph (B) thereof.

20 ‘‘(B) ROUNDING.—If any amount as ad21 justed under subparagraph (A) is not a multiple

22 of $5,000, such amount shall be rounded to the

23 next lowest multiple of $5,000.’’

24 (d) CLERICAL AMENDMENT.—The table of sections

25 for part VII of subchapter B of chapter 1 of such Code
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1 is amended by striking the item relating to section 222

2 and inserting the following new items:

‘‘Sec. 222. Education individual retirement accounts.

‘‘Sec. 223. Cross references.’’

3 (e) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to contributions made in taxable

5 years beginning after December 31, 1998.

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