Empowering Parents to Invest in Choice Act of 2017

To amend the Internal Revenue Code of 1986 to expand the coverage of qualified tuition programs and increase the limitation on contributions to Coverdell education savings accounts. 1. Short title This Act may be cited as the Empowering Parents to Invest in Choice Act of 2017 2. Qualified tuition programs extended to cover elementary and secondary education expenses (a) In general Section 529(e)(3) (3) Qualified education expenses (A) In general The term qualified education expenses (i) qualified elementary and secondary education expenses (as defined in subparagraph (B)), and (ii) qualified higher education expenses (as defined in subparagraph (C)). (B) Qualified elementary and secondary education expenses (i) In general The term qualified elementary and secondary education expenses (I) expenses for tuition, fees, academic tutoring, special needs services in the case of a special needs beneficiary, books, supplies, and other equipment which are incurred in connection with the enrollment or attendance of the designated beneficiary of the trust as an elementary or secondary school student at a public, private, or religious school, (II) expenses for room and board, uniforms, transportation, and supplementary items and services (including extended day programs) which are required or provided by a public, private, or religious school in connection with such enrollment or attendance, and (III) expenses for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in school. Subclause (III) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. (ii) School The term school (C) Qualified higher education expenses (i) In general The term qualified higher education expenses (I) tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution, and (II) expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance. (ii) Room and board included for students who are at least half-time In the case of an individual who is an eligible student (as defined in section 25A(b)(3)) for any academic period, such term shall also include reasonable costs for such period (as determined under the qualified tuition program) incurred by the designated beneficiary for room and board while attending such institution. For purposes of subsection (b)(6), a designated beneficiary shall be treated as meeting the requirements of this clause. (iii) Limitation on room and board included for students who are at least half-time The amount treated as qualified higher education expenses by reason of clause (ii) shall not exceed— (I) the allowance (applicable to the student) for room and board included in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965 ( 20 U.S.C. 1087ll (II) if greater, the actual invoice amount the student residing in housing owned or operated by the eligible educational institution is charged by such institution for room and board costs for such period. . (b) Conforming amendments (1) Section 72(t)(7)(A) of such Code is amended by striking 529(e)(3) 529(e)(3)(C) (2) Section 529(c)(3)(B) of such Code is amended by striking qualified higher education expenses qualified education expenses (3) Section 529(c)(3)(B)(i) of such Code is amended by striking qualified higher education expense qualified education expense (4) Section 529 of such Code is amended by striking qualified higher education expenses qualified education expenses (A) Subsection (b)(1)(A)(i). (B) Subsection (b)(1)(A)(ii). (C) Subsection (b)(6). (D) Subsection (c)(3)(B)(ii)(I). (E) Subsection (c)(3)(B)(v). (F) Subsection (c)(3)(B)(vi)(II). (G) Subsection (c)(6). (5) Section 530(b) of such Code is amended by striking paragraphs (2) and (3) and redesignating paragraph (4) as paragraph (2). (6) Section 1400O(1) of such Code is amended by striking 529(e)(3) 529(e)(3)(C) (c) Effective Date The amendments made by this section shall apply to taxable years beginning after December 31, 2016. 3. Increased limitation on contributions to Coverdell education savings accounts (a) In general Section 530(b)(1)(A)(iii) $2,000 $12,000 (b) Inflation Adjustment Section 530 of such Code is amended by adding at the end the following new subsection: (i) Inflation Adjustment (1) In general In the case of any taxable year beginning after 2014, the $12,000 amount contained in subsection (b)(1)(A)(iii) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) 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 2014 calender year 1992 (2) Rounding rule Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $100. . (c) Effective Date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.

Summary: Empowering Parents to Invest in Choice Act of 2017 This bill amends the Internal Revenue Code to allow the payment of qualified elementary and secondary education expenses from a tax-exempt qualified tuition program (known as a 529 plan). (Currently, such plans only pay qualified higher education expenses.) Included as qualified elementary and secondary education expenses are expenses for: (1) tuition, fees, academic tutoring, special needs services, books, and supplies; (2) room and board, uniforms, transportation, and supplementary items and services; and (3) and computer technology or equipment, including Internet access. The bill also increases from $2,000 to $12,000 the limit on the amount that may be contributed to a tax-exempt Coverdell education savings account. The new contribution limit is adjusted for inflation in each taxable year beginning after 2014.