period at the end of paragraph (19) and inserting ‘‘; 
or’’, and by inserting after paragraph (19) the fol-
lowing new paragraph: 
‘‘(20) any payment made to or for the benefit 
of an employee if at the time of such payment it is 
reasonable to believe that the employee will be able 
to exclude such payment from income under section 
127(d).’’. 
(3) WITHHOLDING TAX.—Subsection (a) of sec-
tion 3401 of such Code is amended by striking ‘‘or’’ 
at the end of paragraph (21), by striking the period 
at the end of paragraph (22) and inserting ‘‘; or’’, 
and by inserting after paragraph (22) the following 
new paragraph: 
‘‘(23) any payment made to or for the benefit 
of an employee if at the time of such payment it is 
reasonable to believe that the employee will be able 
to exclude such payment from income under section 
127(d).’’. 
(4) EMPLOYER CONTRIBUTIONS REQUIRED TO 
BE SHOWN ON W-2.—Subsection (a) of section 6051 
of such Code is amended by striking ‘‘and’’ at the 
end of paragraph (12), by striking the period at the 
end of paragraph (13) and inserting ‘‘, and’’, and by 
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inserting after paragraph (13) the following new 
paragraph: 
‘‘(14) the amount contributed to any lifelong 
learning account (as defined in section 224) on be-
half of such employee.’’. 
(e) TAX ON PROHIBITED TRANSACTIONS.— 
(1) Paragraph (1) of section 4975(e) of the In-
ternal Revenue Code of 1986 (relating to prohibited 
transactions) is amended by redesignating subpara-
graphs (H) and (I) as subparagraphs (I) and (J), 
respectively, and by inserting the following new sub-
paragraph after subparagraph (G): 
‘‘(H) a lifelong learning account described 
in section 224(b),’’. 
(2) Subsection (c) of section 4975 of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(7) SPECIAL RULE FOR LIFELONG LEARNING 
ACCOUNTS.—An individual for whose benefit a life-
long learning account is established shall be exempt 
from the tax imposed by this section with respect to 
any transaction concerning such account (which 
would otherwise be taxable under this section) if, 
with respect to such transaction, the account ceases 
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to be a lifelong learning account by reason of the ap-
plication of section 224(e)(2)(A) to such account.’’. 
(f) FAILURE TO PROVIDE REPORTS ON LIFELONG 
LEARNING ACCOUNTS.—Paragraph (2) of section 6693(a) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘and’’ at the end of subparagraph (D), by redesig-
nating subparagraph (E) as subparagraph (F), and by in-
serting after subparagraph (D) the following new subpara-
graph: 
‘‘(E) section 224(h) (relating to lifelong 
learning accounts), and’’. 
(g) EXEMPTION FROM ERISA REQUIREMENTS.—A 
lifelong learning account (as defined in section 224 of the 
Internal Revenue Code of 1986, as added by this section) 
shall not be treated as an employee welfare benefit plan 
for purposes of title I of the Employee Retirement Income 
Security Act of 1974. 
(h) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of the Internal 
Revenue Code of 1986 is amended by redesignating the 
item relating to section 224 as an item relating to section 
225 and inserting after the item relating to section 223 
the following new item: 
‘‘Sec. 224. Lifelong learning accounts.’’. 
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