Inflation-Adjusted Education Investment Act

Subjects: Taxation

Summary:  <p><strong>Inflation-Adjusted Education Investment Act</strong></p> <p>This bill modifies provisions relating to qualified tuition programs (i.e., tax-exempt 529 plans). Specifically, it increases from $10,000 to $12,000 the limitation under such programs on payments for educational expenses, including expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school. The bill provides for an annual inflation adjustment to the increased limitation amount for taxable years beginning after 2023.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 426 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 426

 To amend the Internal Revenue Code of 1986 to increase and provide an 
inflation adjustment for the limitation on distributions from qualified 
tuition programs that may be used for elementary and secondary tuition.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 15, 2023

  Mr. Kennedy 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 increase and provide an 
inflation adjustment for the limitation on distributions from qualified 
tuition programs that may be used for elementary and secondary tuition.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Inflation-Adjusted Education 
Investment Act''.

SEC. 2. INCREASE ON LIMITATION ON EXPENSES USED FOR ELEMENTARY AND 
              SECONDARY TUITION.

    (a) In General.--The last sentence of section 529(e)(3)(A) of the 
Internal Revenue Code of 1986 is amended by striking ``$10,000'' and 
inserting ``$12,000''.
    (b) Inflation Adjustment.--Section 529(e)(3) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(C) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning in a calendar year after 
                        2023, the $12,000 amount in subparagraph (A) 
                        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 2022' for 
                                `calendar year 2016' in subparagraph 
                                (A)(ii) thereof.
                            ``(ii) Rounding.--Any increase determined 
                        under clause (i) shall be rounded to the 
                        nearest multiple of $500.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.
                                 &lt;all&gt;
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