designated beneficiary for room and board 
while attending such institution. For pur-
poses of subsection (b)(6), a designated 
beneficiary shall be treated as meeting the 
requirements of this clause. 
‘‘(iii) LIMITATION
ON
ROOM
AND 
BOARD
INCLUDED
FOR
STUDENTS
WHO 
ARE AT LEAST HALF-TIME.—The amount 
treated as qualified higher education ex-
penses by reason of clause (ii) shall not ex-
ceed— 
‘‘(I) the allowance (applicable to 
the student) for room and board in-
cluded in the cost of attendance (as 
defined in section 472 of the Higher 
Education Act of 1965 (20 U.S.C. 
1087ll), as in effect on the date of the 
enactment of the Economic Growth 
and Tax Relief Reconciliation Act of 
2001) as determined by the eligible 
educational institution for such pe-
riod, or 
‘‘(II) if greater, the actual invoice 
amount the student residing in hous-
ing owned or operated by the eligible 
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educational institution is charged by 
such institution for room and board 
costs for such period.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 72(t)(7)(A) of such Code is amend-
ed 
by 
striking 
‘‘529(e)(3)’’ 
and 
inserting 
‘‘529(e)(3)(C)’’. 
(2) Section 529(c)(3)(B) of such Code is 
amended by striking ‘‘QUALIFIED
HIGHER
EDU-
CATION EXPENSES’’ in the heading thereof and in-
serting ‘‘QUALIFIED EDUCATION EXPENSES’’. 
(3) Section 529(c)(3)(B)(i) of such Code is 
amended by striking ‘‘qualified higher education ex-
pense’’ and inserting ‘‘qualified education expense’’. 
(4) Section 529 of such Code is amended by 
striking ‘‘qualified higher education expenses’’ each 
place it appears and inserting ‘‘qualified education 
expenses’’ in each of the following: 
(A) Subsection (b)(1)(A)(i). 
(B) Subsection (b)(1)(A)(ii). 
(C) Subsection (b)(6). 
(D) Subsection (c)(3)(B)(ii)(I). 
(E) Subsection (c)(3)(B)(v). 
(F) Subsection (c)(3)(B)(vi)(II). 
(G) Subsection (c)(6). 
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(5) Section 530(b) of such Code is amended by 
striking paragraphs (2) and (3) and redesignating 
paragraph (4) as paragraph (2). 
(6) Section 1400O(1) of such Code is amended 
by 
striking 
‘‘529(e)(3)’’ 
and 
inserting 
‘‘529(e)(3)(C)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
SEC. 3. INCREASED LIMITATION ON CONTRIBUTIONS TO 
COVERDELL 
EDUCATION 
SAVINGS 
AC-
COUNTS. 
(a) IN GENERAL.—Section 530(b)(1)(A)(iii) of the 
Internal Revenue Code of 1986 is amended by striking 
‘‘$2,000’’ and inserting ‘‘$12,000’’. 
(b) INFLATION ADJUSTMENT.—Section 530 of such 
Code is amended by adding at the end the following new 
subsection: 
‘‘(i) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2014, the $12,000 amount con-
tained in subsection (b)(1)(A)(iii) shall be increased 
by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
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‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2014’ for 
‘calender year 1992’ in subparagraph (B) there-
of. 
‘‘(2) ROUNDING
RULE.—Any increase deter-
mined under the preceding sentence shall be rounded 
to the nearest multiple of $100.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
Æ 
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