I
103D CONGRESS
2D SESSION
H. R. 5089
To amend the Internal Revenue Code of 1986 to allow a deduction for
contributions to an individual training account.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 23, 1994
Mr. KLINK introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
deduction for contributions to an individual training account.
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 ‘‘Individual Training
Account Act of 1994’’.
SEC. 2. INDIVIDUAL TRAINING ACCOUNTS.
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions for individuals) is amended
by redesignating section 220 as section 221 and by insert-
ing after section 219 the following new section:
‘‘SEC. 220. INDIVIDUAL TRAINING 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 an individual training account for the benefit
of such individual.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM DEDUCTION.—The amount al-
lowed as a deduction under subsection (a) for any
taxable year shall not exceed the lesser of—
‘‘(A) $2,000, or
‘‘(B) the excess of $6,000 over the aggre-
gate amount in all individual training accounts
of the individual as of the close of the preceding
taxable year.
The preceding sentence shall be applied separately
for each individual.
‘‘(2) NO DEDUCTION BEFORE BENEFICIARY AT-
TAINS AGE 18.—No deduction shall be allowed for
any contribution to an individual training account
established for the benefit of an individual who has
not attained age 18 before the close of the taxable
year for which such contribution is made.
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) INDIVIDUAL
TRAINING
ACCOUNT.—The
term ‘individual training account’ means a trust cre-
ated or organized in the United States exclusively
for the purpose of paying the qualified expenses of
the individual for whose benefit the trust is main-
tained, but only if the written governing instrument
creating the trust meets the following requirements:
‘‘(A) Except in the case of a rollover con-
tribution described in subsection (d)(3), no con-
tribution will be accepted—
‘‘(i) unless it is in cash, or
‘‘(ii) in excess of the amount allowed
as a deduction under this section.
‘‘(B) The trustee is a bank (as defined in
section 408(n)) or another person who dem-
onstrates to the satisfaction of the Secretary
that the manner in which that person will ad-
minister the trust will be consistent with the re-
quirements of this section.
‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts.
‘‘(D) The interest of the individual in the
balance of his account is nonforfeitable.
‘‘(E) The assets of the trust shall not be
commingled with other property except in a
common trust fund or common investment
fund.
‘‘(2) QUALIFIED EXPENSES.—The term ‘quali-
fied expenses’ means—
‘‘(A) job training expenses, and
‘‘(B) job-related relocation expenses.
‘‘(3) JOB TRAINING EXPENSES.—
‘‘(A) IN GENERAL.—The term ‘job training
expenses’ means—
‘‘(i) tuition and fees required for the
enrollment or attendance of—
‘‘(I) a student at an eligible edu-
cational institution, or
‘‘(II) a worker in an applicable
training program,
‘‘(ii) fees, books, supplies, and equip-
ment required for—
‘‘(I) courses of instruction at an
eligible educational institution, or
‘‘(II) for an applicable training
program, and
‘‘(iii) a reasonable allowance for meals
and lodging while attending an eligible