(iii) was not a student (as defined in 
section 151(c)(4) of such Code) for the im-
mediately preceding taxable year, 
(iv) is not an individual with respect 
to whom a deduction under section 151 of 
such Code is allowable to another taxpayer 
for a taxable year of the other taxpayer 
ending during the immediately preceding 
taxable year of the individual, 
(v) is not a taxpayer described in sub-
section (c), (d), or (e) of section 6402 of 
such Code for the immediately preceding 
taxable year, 
(vi) is not a taxpayer described in sec-
tion 1(d) of such Code for the immediately 
preceding taxable year, and 
(vii) is a taxpayer the modified ad-
justed gross income of whom for the imme-
diately preceding taxable year does not ex-
ceed— 
(I) $20,000, in the case of a tax-
payer described in section 1(c) of such 
Code, 
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(II) $30,000, in the case of a 
taxpayer described in section 1(b) of 
such Code, and 
(III) $40,000, in the case of a 
taxpayer described in section 1(a) of 
such Code. 
(B) INFLATION ADJUSTMENT.— 
(i) IN GENERAL.—In the case of any 
taxable year beginning after 2010, each 
dollar amount referred to in subparagraph 
(A)(vii) shall be increased by an amount 
equal to— 
(I) such dollar amount, multi-
plied by 
(II) the cost-of-living adjustment 
determined under section (1)(f)(3) of 
the Internal Revenue Code of 1986 
for the calendar year in which the tax-
able year begins, by substituting 
‘‘2009’’ for ‘‘1992’’. 
(ii) ROUNDING.—If any amount as 
adjusted under clause (i) is not a multiple 
of $50, such amount shall be rounded to 
the nearest multiple of $50. 
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(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A)(v), 
the term ‘‘modified adjusted gross income’’ 
means adjusted gross income— 
(i) determined without regard to sec-
tions 86, 893, 911, 931, and 933 of the 
Internal Revenue Code of 1986, and 
(ii) increased by the amount of inter-
est received or accrued by the taxpayer 
during the taxable year which is exempt 
from tax. 
(2) INDIVIDUAL
DEVELOPMENT
ACCOUNT.— 
The term ‘‘Individual Development Account’’ means 
an account established for an eligible individual as 
part of a qualified individual development account 
program, but only if the written governing instru-
ment creating the account meets the following re-
quirements: 
(A) The owner of the account is the indi-
vidual for whom the account was established. 
(B) No contribution will be accepted unless 
it is in cash, and, except in the case of any 
qualified rollover, contributions will not be ac-
cepted for the taxable year in excess of $1,500 
on behalf of any individual. 
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(C) The trustee of the account is a quali-
fied financial institution. 
(D) The assets of the account will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
(E) Except as provided in section 7(b), any 
amount in the account may be paid out only for 
the purpose of paying the qualified expenses of 
the account owner. 
(3) PARALLEL ACCOUNT.—The term ‘‘parallel 
account’’ means a separate, parallel individual or 
pooled account for all matching funds and earnings 
dedicated to an Individual Development Account 
owner as part of a qualified individual development 
account program, the trustee of which is a qualified 
financial institution. 
(4) QUALIFIED FINANCIAL INSTITUTION.— 
(A) IN GENERAL.—The term ‘‘qualified fi-
nancial institution’’ means any person author-
ized to be a trustee of any individual retirement 
account under section 408(a)(2) of the Internal 
Revenue Code of 1986. 
(B) RULE OF CONSTRUCTION.— 
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(i) IN
GENERAL.—Nothing in this 
paragraph shall be construed as preventing 
a person described in subparagraph (A) 
from collaborating with 1 or more qualified 
nonprofit organizations or Indian tribes to 
carry out an individual development ac-
count program established under section 4. 
(ii) QUALIFIED
NONPROFIT
ORGANI-
ZATION.—The term ‘‘qualified nonprofit 
organization’’ means— 
(I) any organization described in 
section 501(c)(3) of the Internal Rev-
enue Code of 1986 and exempt from 
taxation under section 501(a) of such 
Code, 
(II) any community development 
financial institution certified by the 
Community Development Financial 
Institution Fund, 
(III) any credit union chartered 
under Federal or State law, or 
(IV) any public housing agency 
as defined in section 3(b)(6) of the 
United States Housing Act of 1937 
(42 U.S.C. 1437a(b)(6)). 
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