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) TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—For purposes of this section, a taxpayer
shall be deemed to have made a contribution to an
education individual retirement account on the last
day of the preceding taxable year if the contribution
is made on account of such taxable year and is made
not later than the time prescribed by law for filing
the return for such taxable year (not including ex-
tensions thereof).
‘‘(4) EMPLOYER PAYMENTS.—For purposes of
this title, any amount paid by an employer to an
education individual retirement account shall be
treated as payment of compensation to the employee
(other than a self-employed individual who is an em-
ployee within the meaning of section 401(c)(1)) in-
cludible 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
INDI-
VIDUAL 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 (iii), by striking the
period at the end of clause (iv) and inserting ‘‘, or’’, and
by adding at the end the following new clause:
‘‘(v) 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 fol-
lowing flush sentence:
‘‘The age limitations in this paragraph 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, 1999.
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