Title: To amend the Internal Revenue Code of 1986 to provide for distributions from 529 plans to pay certain early education expenses.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to allow tax-free distributions from qualified tuition programs (known as 529 plans) to be used for qualified early education expenses, subject to a limit of $10,000 per beneficiary.
"Qualified early education expenses" are expenses for providing educational and other care to a child under age 5 (including childcare provided before and after school), as determined under state law and pursuant to attendance at a school or facility licensed in the state for the purpose.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7021 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 7021

To amend the Internal Revenue Code of 1986 to provide for distributions 
        from 529 plans to pay certain early education expenses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 2, 2018

  Mr. Paulsen (for himself and Mr. Coffman) 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 provide for distributions 
        from 529 plans to pay certain early education expenses.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DISTRIBUTIONS FROM 529 PLANS FOR CERTAIN EARLY EDUCATION 
              EXPENSES.

    (a) In General.--Section 529(e)(3) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(C) Special rules permitting limited treatment of 
                qualified early education expenses.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), qualified early education expenses 
                        shall be treated as qualified higher education 
                        expenses.
                            ``(ii) Limitation.--If the aggregate amount 
                        of cash distributions from all qualified 
                        tuition programs described in subsection 
                        (b)(1)(A)(ii) with respect to a beneficiary for 
                        qualified early education expenses during any 
                        taxable year exceeds $10,000, such excess shall 
                        be treated for purposes of subsection (c)(3) as 
                        distributions in excess of the qualified higher 
                        education expenses of the beneficiary.
                            ``(iii) Qualified early education 
                        expenses.--For purposes of this subparagraph, 
                        the term `qualified early education expenses' 
                        means expenses for providing educational and 
                        other care to a child under age 5 (including 
                        childcare provided before and after school), as 
                        determined under the law of the State, pursuant 
                        to attendance at a school or facility licensed 
                        in the State for such purpose.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2018.
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