I
105TH CONGRESS
2D SESSION
H. R. 3307
To amend the Internal Revenue Code of 1986 to allow individuals a deduction
for contributions to education individual retirement accounts, to increase
the amount which may be contributed to such accounts, to permit such
accounts to be used to pay elementary and secondary education expenses
and training expenses of older individuals, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 3, 1998
Mr. ENGLISH of Pennsylvania (for himself, Mr. WELDON of Pennsylvania, and
Mr. PAUL) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow indi-
viduals a deduction for contributions to education indi-
vidual retirement accounts, to increase the amount which
may be contributed to such accounts, to permit such
accounts to be used to pay elementary and secondary
education expenses and training expenses of older indi-
viduals, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Education for Life Act
of 1998’’.
SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RE-
TIREMENT ACCOUNTS.
(a) WITHDRAWALS FOR ELEMENTARY AND SECOND-
ARY SCHOOL EXPENSES AND FOR JOB TRAINING EX-
PENSES BY OLDER INDIVIDUALS.—
(1) IN GENERAL.—Section 530(b)(2) of the In-
ternal Revenue Code of 1986 is amended to read as
follows:
‘‘(2) QUALIFIED EDUCATION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
education expenses’ means—
‘‘(i) qualified elementary and second-
ary education expenses (as defined in para-
graph (4)),
‘‘(ii) qualified higher education ex-
penses (as defined in section 529(e)(3)),
and
‘‘(iii) qualified job training expenses
(as defined in paragraph (5)).
Such expenses shall be reduced as provided in
section 25A(g)(2).
‘‘(B) QUALIFIED
STATE
TUITION
PRO-
GRAMS.—Such term shall include amounts paid
or incurred to purchase tuition credits or cer-
tificates, or to make contributions to an ac-
count, under a qualified State tuition program
(as defined in section 529(b)) for the benefit of
the beneficiary of the account.’’.
(2) QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION
EXPENSES; QUALIFIED
JOB
TRAINING
EXPENSES.—Section 530(b) of such Code is amend-
ed by adding at the end the following new para-
graphs:
‘‘(4) QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION EXPENSES.—
‘‘(A) IN GENERAL.—The term ‘qualified el-
ementary and secondary education expenses’
means tuition, fees, tutoring, special needs serv-
ices, books, supplies, computer equipment (in-
cluding related software and services) and other
equipment, transportation, and supplementary
expenses required for the enrollment or attend-
ance of the designated beneficiary of the trust
at a public, private, or religious school.
‘‘(B) 
SPECIAL
RULE
FOR
HOME-
SCHOOLING.—Such term shall include expenses
described in subparagraph (A) required for edu-
cation provided for homeschooling if the re-
quirements of any applicable State or local law
are met with respect to such education.
‘‘(C) SCHOOL.—The term ‘school’ means
any school which provides elementary education
or secondary education (through grade 12), as
determined under State law.
‘‘(5) QUALIFIED JOB TRAINING EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
job training expenses’ means—
‘‘(i) tuition and fees required for the
enrollment or attendance of a worker in an
applicable training program,
‘‘(ii) fees, books, supplies, and equip-
ment required for an applicable training
program, and
‘‘(iii) a reasonable allowance for meals
and lodging while attending an applicable
training program.
‘‘(B) APPLICABLE TRAINING PROGRAM.—
For purposes of subparagraph (A), the term
‘applicable training program’ means—
‘‘(i) any applicable program (as de-
fined in section 314(g) of the Job Training
Partnership Act), and
‘‘(ii) any training program approved
under section 236 of the Trade Act of
1974.’’.
(3) CONTRIBUTIONS TO ACCOUNT PERMITTED
UNTIL BENEFICIARY ATTAINS AGE 55.—Clause (ii)
of section 530(b)(1)(A) of such Code is amended by
striking ‘‘age 18’’ and inserting ‘‘age 55’’.
(4) CONFORMING
AMENDMENTS.—Subsections
(b)(1) and (d)(2) of section 530 of such Code are
each amended by striking ‘‘higher’’ each place it ap-
pears in the text and heading thereof.
(b) INCREASE
IN MAXIMUM CONTRIBUTIONS
TO
EDUCATION INDIVIDUAL RETIREMENT ACCOUNTS.—Sub-
sections (b)(1)(A)(iii) and (d)(4)(C) of section 530, and
section 4973(e)(1)(A), of such Code are each amended by
striking ‘‘$500’’ and inserting ‘‘$2,500’’.
(c) DEDUCTION FOR CONTRIBUTIONS TO EDUCATION
INDIVIDUAL RETIREMENT ACCOUNTS.—
(1) IN GENERAL.—Part VII of subchapter B of
chapter 1 of such Code (relating to additional
itemized deductions for individuals) is amended by
redesignating section 222 as section 223 and by in-
serting after section 221 the following new section:
‘‘SEC. 222. CONTRIBUTIONS TO EDUCATION INDIVIDUAL
RETIREMENT ACCOUNTS.
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual, there shall be allowed as a deduction the amount
paid in cash for the taxable year by or on behalf of such
individual to any education individual retirement account
for the benefit of any individual.
‘‘(b) MAXIMUM DEDUCTION.—The amount allowable
as a deduction under subsection (a) shall not exceed
$2,500 with respect to each individual for whose benefit
the payments referred to in subsection (a) are made.
‘‘(c) OTHER LIMITATIONS AND RESTRICTIONS.—
‘‘(1) BENEFICIARY MUST BE UNDER AGE 55.—
No deduction shall be allowed under this section for
any payment for the benefit of an individual if such
individual has attained age 55 before the date that
the payment is made.
‘‘(2) RECONTRIBUTED
AMOUNTS.—No deduc-
tion shall be allowed under this section with respect
to a rollover contribution.
‘‘(3) EMPLOYER PAYMENTS.—For purposes of
this title, any amount paid by an employer to an
education individual retirement plan shall be treated
as payment of compensation to the employee (other
than a self-employed individual who is an employee
within the meaning of section 401(c)(1)) includible
in his gross income in the taxable year for which the
amount was contributed, whether or not a deduction
for such payment is allowable under this section to
the employee.’’.
(2) DEDUCTION ALLOWED WHETHER OR NOT
TAXPAYER
ITEMIZES
OTHER
DEDUCTIONS.—Sub-
section (a) of section 62 of such Code is amended
by inserting after paragraph (17) the following new
paragraph:
‘‘(18) CONTRIBUTIONS TO EDUCATION INDIVID-
UAL
RETIREMENT
ACCOUNTS.—The deduction al-
lowed by section 222.’’.
(3) CLERICAL AMENDMENT.—The table of sec-
tions for part VII of subchapter B of chapter 1 of
such Code is amended by striking the last item and
inserting the following new items:
‘‘Sec. 222. Contributions to education individual retirement ac-
counts.
‘‘Sec. 223. Cross reference.’’.
(d) NO PENALTY FOR DISTRIBUTIONS NOT USED
FOR EDUCATION EXPENSES AFTER DATE BENEFICIARY
ATTAINS
AGE
591⁄2.—Subparagraph (B) of section
530(d)(4) of such Code (relating to additional tax for dis-
tributions not used for educational expenses) is amended
by striking ‘‘or’’ at the end of clause (ii), by striking the
period at the end of clause (iii) and inserting ‘‘, or’’, and
by adding at the end the following new clause:
‘‘(iv) made to the designated bene-
ficiary on or after the date on which the
designated beneficiary attains age 591⁄2.’’.
(e) WAIVER OF AGE LIMITATIONS FOR CHILDREN
WITH SPECIAL NEEDS.—Paragraph (1) of section 530(b)
of such Code is amended by adding at the end the follow-
ing flush sentence:
‘‘The age limitations in the preceding sentence shall
not apply to any designated beneficiary with special
needs (as determined under regulations prescribed
by the Secretary).’’.
(f) CORPORATIONS PERMITTED TO CONTRIBUTE TO
ACCOUNTS.—Paragraph (1) of section 530(c) of such
Code is amended by striking ‘‘The maximum amount
which a contributor’’ and inserting ‘‘In the case of a con-
tributor who is an individual, the maximum amount the
contributor’’.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
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