Internal Revenue Code:Sec. 529. Qualified tuition programs
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Contents |
Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter F - Exempt Organizations
PART VIII - HIGHER EDUCATION SAVINGS ENTITIES
Statute
Sec. 529. Qualified tuition programs
(a) General rule
A qualified tuition program shall be exempt from taxation under
this subtitle. Notwithstanding the preceding sentence, such
program shall be subject to the taxes imposed by section 511
(relating to imposition of tax on unrelated business income of
charitable organizations).
(b) Qualified tuition program
For purposes of this section -
(1) In general
The term ''qualified tuition program'' means a program
established and maintained by a State or agency or
instrumentality thereof or by 1 or more eligible educational
institutions -
(A) under which a person -
(i) may purchase tuition credits or certificates on behalf
of a designated beneficiary which entitle the beneficiary to
the waiver or payment of qualified higher education expenses
of the beneficiary, or
(ii) in the case of a program established and maintained by
a State or agency or instrumentality thereof, may make
contributions to an account which is established for the
purpose of meeting the qualified higher education expenses of
the designated beneficiary of the account, and
(B) which meets the other requirements of this subsection.
Except to the extent provided in regulations, a program
established and maintained by 1 or more eligible educational
institutions shall not be treated as a qualified tuition program
unless such program provides that amounts are held in a qualified
trust and such program has received a ruling or determination
that such program meets the applicable requirements for a
qualified tuition program. For purposes of the preceding
sentence, the term ''qualified trust'' means a trust which is
created or organized in the United States for the exclusive
benefit of designated beneficiaries and with respect to which the
requirements of paragraphs (2) and (5) of section 408(a) are met.
(2) Cash contributions
A program shall not be treated as a qualified tuition program
unless it provides that purchases or contributions may only be
made in cash.
(3) Separate accounting
A program shall not be treated as a qualified tuition program
unless it provides separate accounting for each designated
beneficiary.
(4) No investment direction
A program shall not be treated as a qualified tuition program
unless it provides that any contributor to, or designated
beneficiary under, such program may not directly or indirectly
direct the investment of any contributions to the program (or any
earnings thereon).
(5) No pledging of interest as security
A program shall not be treated as a qualified tuition program
if it allows any interest in the program or any portion thereof
to be used as security for a loan.
(6) Prohibition on excess contributions
A program shall not be treated as a qualified tuition program
unless it provides adequate safeguards to prevent contributions
on behalf of a designated beneficiary in excess of those
necessary to provide for the qualified higher education expenses
of the beneficiary.
(c) Tax treatment of designated beneficiaries and contributors
(1) In general
Except as otherwise provided in this subsection, no amount
shall be includible in gross income of -
(A) a designated beneficiary under a qualified tuition
program, or
(B) a contributor to such program on behalf of a designated
beneficiary,
with respect to any distribution or earnings under such program.
(2) Gift tax treatment of contributions
For purposes of chapters 12 and 13 -
(A) In general
Any contribution to a qualified tuition program on behalf of
any designated beneficiary -
(i) shall be treated as a completed gift to such
beneficiary which is not a future interest in property, and
(ii) shall not be treated as a qualified transfer under
section 2503(e).
(B) Treatment of excess contributions
If the aggregate amount of contributions described in
subparagraph (A) during the calendar year by a donor exceeds
the limitation for such year under section 2503(b), such
aggregate amount shall, at the election of the donor, be taken
into account for purposes of such section ratably over the
5-year period beginning with such calendar year.
(3) Distributions
(A) In general
Any distribution under a qualified tuition program shall be
includible in the gross income of the distributee in the manner
as provided under section 72 to the extent not excluded from
gross income under any other provision of this chapter.
(B) Distributions for qualified higher education expenses
For purposes of this paragraph -
(i) In-kind distributions
No amount shall be includible in gross income under
subparagraph (A) by reason of a distribution which consists
of providing a benefit to the distributee which, if paid for
by the distributee, would constitute payment of a qualified
higher education expense.
(ii) Cash distributions
In the case of distributions not described in clause (i),
if -
(I) such distributions do not exceed the qualified higher
education expenses (reduced by expenses described in clause
(i)), no amount shall be includible in gross income, and
(II) in any other case, the amount otherwise includible
in gross income shall be reduced by an amount which bears
the same ratio to such amount as such expenses bear to such
distributions.
(iii) Exception for institutional programs
In the case of any taxable year beginning before January 1,
2004, clauses (i) and (ii) shall not apply with respect to
any distribution during such taxable year under a qualified
tuition program established and maintained by 1 or more
eligible educational institutions.
(iv) Treatment as distributions
Any benefit furnished to a designated beneficiary under a
qualified tuition program shall be treated as a distribution
to the beneficiary for purposes of this paragraph.
(v) Coordination with Hope and Lifetime Learning credits
The total amount of qualified higher education expenses
with respect to an individual for the taxable year shall be
reduced -
(I) as provided in section 25A(g)(2), and
(II) by the amount of such expenses which were taken into
account in determining the credit allowed to the taxpayer
or any other person under section 25A.
(vi) Coordination with Coverdell education savings accounts
If, with respect to an individual for any taxable year -
(I) the aggregate distributions to which clauses (i) and
(ii) and section 530(d)(2)(A) apply, exceed
(II) the total amount of qualified higher education
expenses otherwise taken into account under clauses (i) and
(ii) (after the application of clause (v)) for such year,
the taxpayer shall allocate such expenses among such
distributions for purposes of determining the amount of the
exclusion under clauses (i) and (ii) and section
530(d)(2)(A).
(C) Change in beneficiaries or programs
(i) Rollovers
Subparagraph (A) shall not apply to that portion of any
distribution which, within 60 days of such distribution, is
transferred -
(I) to another qualified tuition program for the benefit
of the designated beneficiary, or
(II) to the credit of another designated beneficiary
under a qualified tuition program who is a member of the
family of the designated beneficiary with respect to which
the distribution was made.
(ii) Change in designated beneficiaries
Any change in the designated beneficiary of an interest in
a qualified tuition program shall not be treated as a
distribution for purposes of subparagraph (A) if the new
beneficiary is a member of the family of the old beneficiary.
(iii) Limitation on certain rollovers
Clause (i)(I) shall not apply to any transfer if such
transfer occurs within 12 months from the date of a previous
transfer to any qualified tuition program for the benefit of
the designated beneficiary.
(D) Operating rules
For purposes of applying section 72 -
(i) to the extent provided by the Secretary, all qualified
tuition programs of which an individual is a designated
beneficiary shall be treated as one program,
(ii) except to the extent provided by the Secretary, all
distributions during a taxable year shall be treated as one
distribution, and
(iii) except to the extent provided by the Secretary, the
value of the contract, income on the contract, and investment
in the contract shall be computed as of the close of the
calendar year in which the taxable year begins.
(4) Estate tax treatment
(A) In general
No amount shall be includible in the gross estate of any
individual for purposes of chapter 11 by reason of an interest
in a qualified tuition program.
(B) Amounts includible in estate of designated beneficiary in
certain cases
Subparagraph (A) shall not apply to amounts distributed on
account of the death of a beneficiary.
(C) Amounts includible in estate of donor making excess
contributions
In the case of a donor who makes the election described in
paragraph (2)(B) and who dies before the close of the 5-year
period referred to in such paragraph, notwithstanding
subparagraph (A), the gross estate of the donor shall include
the portion of such contributions properly allocable to periods
after the date of death of the donor.
(5) Other gift tax rules
For purposes of chapters 12 and 13 -
(A) Treatment of distributions
Except as provided in subparagraph (B), in no event shall a
distribution from a qualified tuition program be treated as a
taxable gift.
(B) Treatment of designation of new beneficiary.--
The taxes imposed by chapters 12 and 13 shall apply
to a transfer by reason of a change in the designated
beneficiary under the program (or a rollover to the
account of a new beneficiary) unless the new
beneficiary is--
(i) assigned to the same generation as (or a
higher generation than) the old beneficiary
(determined in accordance with section 2651), and
(ii) a member of the family of the old
beneficiary.
(6) Additional tax
The tax imposed by section 530(d)(4) shall apply to any payment
or distribution from a qualified tuition program in the same
manner as such tax applies to a payment or distribution from an
Coverdell education individual retirement account. This paragraph shall
not apply to any payment or distribution in any taxable year
beginning before January 1, 2004, which is includible in gross
income but used for qualified higher education expenses of the
designated beneficiary.
(d) Reports
Each officer or employee having control of the qualified tuition
program or their designee shall make such reports regarding such
program to the Secretary and to designated beneficiaries with
respect to contributions, distributions, and such other matters as
the Secretary may require. The reports required by this subsection
shall be filed at such time and in such manner and furnished to
such individuals at such time and in such manner as may be required
by the Secretary.
(e) Other definitions and special rules
For purposes of this section -
(1) Designated beneficiary
The term ''designated beneficiary'' means -
(A) the individual designated at the commencement of
participation in the qualified tuition program as the
beneficiary of amounts paid (or to be paid) to the program,
(B) in the case of a change in beneficiaries described in
subsection (c)(3)(C), the individual who is the new
beneficiary, and
(C) in the case of an interest in a qualified tuition program
purchased by a State or local government (or agency or
instrumentality thereof) or an organization described in
section 501(c)(3) and exempt from taxation under section 501(a)
as part of a scholarship program operated by such government or
organization, the individual receiving such interest as a
scholarship.
(2) Member of family
The term ''member of the family'' means, with respect to any
designated beneficiary -
(A) the spouse of such beneficiary;
(B) an individual who bears a relationship to such
beneficiary which is described in subparagraphs (A)
through (G) of section 152(d)(2);
(C) the spouse of any individual described in subparagraph
(B); and
(D) any first cousin of such beneficiary.
(3) Qualified higher education expenses
(A) In general
The term ''qualified higher education expenses'' means -
(i) tuition, fees, books, supplies, and equipment required
for the enrollment or attendance of a designated beneficiary
at an eligible educational institution; and
(ii) expenses for special needs services in the case of a
special needs beneficiary which are incurred in connection
with such enrollment or attendance.
(B) Room and board included for students who are at least
half-time
(i) In general
In the case of an individual who is an eligible student (as
defined in section 25A(b)(3)) for any academic period, such
term shall also include reasonable costs for such period (as
determined under the qualified tuition program) incurred by
the designated beneficiary for room and board while attending
such institution. For purposes of subsection (b)(6), a
designated beneficiary shall be treated as meeting the
requirements of this clause.
(ii) Limitation
The amount treated as qualified higher education expenses
by reason of clause (i) shall not exceed -
(I) the allowance (applicable to the student) for room
and board included 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 period, or
(II) if greater, the actual invoice amount the student
residing in housing owned or operated by the eligible
educational institution is charged by such institution for
room and board costs for such period.
(4) Application of section 514
An interest in a qualified tuition program shall not be treated
as debt for purposes of section 514.
(5) Eligible educational institution
The term ''eligible educational institution'' means an
institution -
(A) which is described in section 481 of the Higher Education
Act of 1965 (20 U.S.C. 1088), as in effect on the date of the
enactment of this paragraph, and
(B) which is eligible to participate in a program under title
IV of such Act.
(f) Regulations.--Notwithstanding any other provision of this
section, the Secretary shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of this section and
to prevent abuse of such purposes, including regulations under chapters
11, 12, and 13 of this title.
Sources
(Added Pub. L. 104-188, title I, Sec. 1806(a), Aug. 20, 1996, 110
Stat. 1895; amended Pub. L. 105-34, title II, Sec. 211(a), (b),
(d), (e)(2)(A), title XVI, Sec. 1601(h)(1)(A), (B), Aug. 5, 1997,
111 Stat. 810, 812, 1092; Pub. L. 105-206, title VI, Sec.
6004(c)(2), (3), July 22, 1998, 112 Stat. 793; Pub. L. 106-554,
Sec. 1(a)(7) (title III, Sec. 319(5)), Dec. 21, 2000, 114 Stat.
2763, 2763A-646; Pub. L. 107-16, title IV, Sec. 402(a)(1)-(3),
(4)(A), (C), (D), (b)(1), (c)-(g), June 7, 2001, 115 Stat. 60-63;
Pub. L. 107-22, Sec. 1(b)(3)(C), July 26, 2001, 115 Stat. 197.)
Amendment of Section
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
References in Text
REFERENCES IN TEXT
The date of the enactment of the Economic Growth and Tax Relief
Reconciliation Act of 2001, referred to in subsec.
(e)(3)(B)(ii)(I), is the date of enactment of Pub. L. 107-16, which
was approved June 7, 2001.
The date of the enactment of this paragraph, referred to in
subsec. (e)(5)(A), probably means the date of enactment of Pub. L.
105-34, which enacted subsec. (e)(5) and which was approved Aug. 5,
1997.
The Higher Education Act of 1965, referred to in subsec. (e)(5),
is Pub. L. 89-329, Nov. 8, 1965, 79 Stat. 1219, as amended. Title
IV of the Act is classified generally to subchapter IV (Sec. 1070
et seq.) of chapter 28 of Title 20, Education, and part C (Sec.
2751 et seq.) of subchapter I of chapter 34 of Title 42, The Public
Health and Welfare. For complete classification of this Act to the
Code, see Short Title note set out under section 1001 of Title 20
and Tables.
Miscellaneous
AMENDMENTS
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 1304. <<NOTE: 26 USC 1 note.>> QUALIFIED TUITION PROGRAMS.
(b) <<NOTE: 26 USC 529.>> Regulatory Authority To Prevent Abuse.--
Section 529 (relating to qualified tuition programs) is amended by
adding at the end the following new subsection:
``(f) Regulations.--Notwithstanding any other provision of this
section, the Secretary shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of this section and
to prevent abuse of such purposes, including regulations under chapters
11, 12, and 13 of this title.''.
2004 - Subsec.406(a),Pub.L.108-311, amended Sec.529(c)(5)(B).
2004 - Pub.L. 108-311 Sec. 207(21). Section 529(e)(2)(B) is amended
by striking ``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section 152(d)(2)''.
2001 - Pub. L. 107-16, Sec. 402(a)(4)(D), 901, temporarily struck
out ''State'' before ''tuition'' in section catchline. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a). Pub. L. 107-16, Sec. 402(a)(4)(A), 901, temporarily
substituted ''qualified tuition'' for ''qualified State tuition''.
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (b). Pub. L. 107-16, Sec. 402(a)(4)(C), 901, temporarily
substituted ''Qualified tuition'' for ''Qualified State tuition''
in heading. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (b)(1). Pub. L. 107-16, Sec. 402(a)(1), (4)(A), 901, in
introductory provisions, temporarily substituted ''qualified
tuition'' for ''qualified State tuition'' and inserted ''or by 1 or
more eligible educational institutions'' after ''thereof'', and
temporarily added concluding provisions. See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (b)(1)(A)(ii). Pub. L. 107-16, Sec. 402(a)(2), 901,
temporarily inserted ''in the case of a program established and
maintained by a State or agency or instrumentality thereof,''
before ''may make''. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (b)(2). Pub. L. 107-16, Sec. 402(a)(4)(A), 901,
temporarily substituted ''qualified tuition'' for ''qualified State
tuition''. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (b)(3) to (7). Pub. L. 107-16, Sec. 402(a)(3)(A), (4)(A),
901, temporarily redesignated pars. (4) to (7) as (3) to (6),
respectively, substituted ''qualified tuition'' for ''qualified
State tuition'' wherever appearing, and struck out heading and text
of former par. (3). Text read as follows: ''A program shall not be
treated as a qualified State tuition program unless it imposes a
more than de minimis penalty on any refund of earnings from the
account which are not -
''(A) used for qualified higher education expenses of the
designated beneficiary,
''(B) made on account of the death or disability of the
designated beneficiary, or
''(C) made on account of a scholarship (or allowance or payment
described in section 135(d)(1)(B) or (C)) received by the
designated beneficiary to the extent the amount of the refund
does not exceed the amount of the scholarship, allowance, or
payment.''
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(1)(A), (3)(A). Pub. L. 107-16, Sec. 402(a)(4)(A),
901, temporarily substituted ''qualified tuition'' for ''qualified
State tuition''. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (c)(3)(B). Pub. L. 107-16, Sec. 402(b)(1), 901,
temporarily amended heading and text of subpar. (B) generally.
Prior to amendment, text read as follows: ''Any benefit furnished
to a designated beneficiary under a qualified tuition program shall
be treated as a distribution to the beneficiary.'' See Effective
and Termination Dates of 2001 Amendment note below.
Pub. L. 107-16, Sec. 402(a)(4)(A), 901, temporarily substituted
''qualified tuition'' for ''qualified State tuition''. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(3)(B)(vi). Pub. L. 107-22 substituted ''Coverdell
education savings'' for ''education individual retirement'' in
heading.
Subsec. (c)(3)(C). Pub. L. 107-16, Sec. 402(c)(3), 901,
temporarily inserted ''or programs'' after ''beneficiaries'' in
heading. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (c)(3)(C)(i). Pub. L. 107-16, Sec. 402(c)(1), 901,
temporarily substituted ''transferred - '' for ''transferred'',
added subcl. (I), and designated existing provisions ''to the
credit'' as subcl. (II). See Effective and Termination Dates of
2001 Amendment note below.
Pub. L. 107-16, Sec. 402(a)(4)(A), 901, temporarily substituted
''qualified tuition'' for ''qualified State tuition''. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(3)(C)(ii). Pub. L. 107-16, Sec. 402(a)(4)(A), 901,
temporarily substituted ''qualified tuition'' for ''qualified State
tuition''. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (c)(3)(C)(iii). Pub. L. 107-16, Sec. 402(c)(2), 901,
temporarily added cl. (iii). See Effective and Termination Dates of
2001 Amendment note below.
Subsec. (c)(3)(D)(i). Pub. L. 107-16, Sec. 402(a)(4)(A), 901,
temporarily substituted ''qualified tuition'' for ''qualified State
tuition''. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (c)(3)(D)(ii). Pub. L. 107-16, Sec. 402(g)(1), 901,
temporarily inserted ''except to the extent provided by the
Secretary,'' before ''all distributions''. See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (c)(3)(D)(iii). Pub. L. 107-16, Sec. 402(g)(2), 901,
temporarily inserted ''except to the extent provided by the
Secretary,'' before ''the value''. See Effective and Termination
Dates of 2001 Amendment note below.
Subsec. (c)(6). Pub. L. 107-16, Sec. 402(a)(3)(B), 901,
temporarily added par. (6). See Effective and Termination Dates of
2001 Amendment note below.
Subsecs. (d), (e)(1)(A), (C). Pub. L. 107-16, Sec. 402(a)(4)(A),
901, temporarily substituted ''qualified tuition'' for ''qualified
State tuition''. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (e)(2)(D). Pub. L. 107-16, Sec. 402(d), 901, temporarily
added subpar. (D). See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (e)(3)(A). Pub. L. 107-16, Sec. 402(f), 901, temporarily
reenacted heading without change and amended text of subpar. (A)
generally. Prior to amendment, text read as follows: ''The term
'qualified higher education expenses' means tuition, fees, books,
supplies, and equipment required for the enrollment or attendance
of a designated beneficiary at an eligible educational
institution.'' See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (e)(3)(B)(i). Pub. L. 107-16, Sec. 402(a)(4)(A), 901,
temporarily substituted ''qualified tuition'' for ''qualified State
tuition''. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (e)(3)(B)(ii). Pub. L. 107-16, Sec. 402(e), 901,
temporarily reenacted heading without change and amended text of
cl. (ii) generally. Prior to amendment, text read as follows:
''The amount treated as qualified higher education expenses by
reason of the preceding sentence shall not exceed the minimum
amount (applicable to the student) included for room and board for
such period 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 this paragraph) for the eligible
educational institution for such period.'' See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (e)(4). Pub. L. 107-16, Sec. 402(a)(4)(A), 901,
temporarily substituted ''qualified tuition'' for ''qualified State
tuition''. See Effective and Termination Dates of 2001 Amendment
note below.
2000 - Subsec. (e)(3)(B). Pub. L. 106-554 struck out ''under
guaranteed plans'' after ''students'' in heading.
1998 - Subsec. (c)(3)(A). Pub. L. 105-206, Sec. 6004(c)(2),
substituted ''section 72'' for ''section 72(b)''.
Subsec. (e)(2). Pub. L. 105-206, Sec. 6004(c)(3), reenacted
heading without change and amended text of par. (2) generally.
Prior to amendment, text read as follows: ''The term 'member of the
family' means -
''(A) an individual who bears a relationship to another
individual which is a relationship described in paragraphs (1)
through (8) of section 152(a), and
''(B) the spouse of any individual described in subparagraph
(A).''
1997 - Subsec. (b)(5). Pub. L. 105-34, Sec. 211(b)(4), inserted
''directly or indirectly'' after ''may not''.
Subsec. (c)(2). Pub. L. 105-34, Sec. 211(b)(3)(A)(i), amended
heading and text of par. (2) generally. Prior to amendment, text
read as follows: ''In no event shall a contribution to a qualified
State tuition program on behalf of a designated beneficiary be
treated as a taxable gift for purposes of chapter 12.''
Subsec. (c)(3)(A). Pub. L. 105-34, Sec. 211(d), substituted
''section 72(b)'' for ''section 72''.
Subsec. (c)(4). Pub. L. 105-34, Sec. 211(b)(3)(B), amended
heading and text of par. (4) generally. Prior to amendment, text
read as follows: ''The value of any interest in any qualified State
tuition program which is attributable to contributions made by an
individual to such program on behalf of any designated beneficiary
shall be includible in the gross estate of the contributor for
purposes of chapter 11.''
Subsec. (c)(5). Pub. L. 105-34, Sec. 211(b)(3)(A)(ii), amended
heading and text of par. (5) generally. Prior to amendment, text
read as follows: ''For purposes of section 2503(e), the waiver (or
payment to an educational institution) of qualified higher
education expenses of a designated beneficiary under a qualified
State tuition program shall be treated as a qualified transfer.''
Subsec. (d). Pub. L. 105-34, Sec. 211(e)(2)(A), amended subsec.
(d) generally. Prior to amendment, subsec. (d) read as follows:
''(d) Reporting Requirements. -
''(1) In general. - If there is a distribution to any
individual with respect to an interest in a qualified State
tuition program during any calendar year, each officer or
employee having control of the qualified State tuition program or
their designee shall make such reports as the Secretary may
require regarding such distribution to the Secretary and to the
designated beneficiary or the individual to whom the distribution
was made. Any such report shall include such information as the
Secretary may prescribe.
''(2) Timing of reports. - Any report required by this
subsection -
''(A) shall be filed at such time and in such matter as the
Secretary prescribes, and
''(B) shall be furnished to individuals not later than
January 31 of the calendar year following the calendar year to
which such report relates.''
Subsec. (e)(1)(B). Pub. L. 105-34, Sec. 1601(h)(1)(A),
substituted ''subsection (c)(3)(C)'' for ''subsection (c)(2)(C)''.
Subsec. (e)(1)(C). Pub. L. 105-34, Sec. 1601(h)(1)(B), inserted
''(or agency or instrumentality thereof)'' after ''local
government''.
Subsec. (e)(2). Pub. L. 105-34, Sec. 211(b)(1), amended heading
and text of par. (2) generally. Prior to amendment, text read as
follows: ''The term 'member of the family' has the same meaning
given such term as section 2032A(e)(2).''
Subsec. (e)(3). Pub. L. 105-34, Sec. 211(a), amended heading and
text of par. (3) generally. Prior to amendment, text read as
follows: ''The term 'qualified higher education expenses' means
tuition, fees, books, supplies, and equipment required for the
enrollment or attendance of a designated beneficiary at an eligible
educational institution (as defined in section 135(c)(3)).''
Subsec. (e)(5). Pub. L. 105-34, Sec. 211(b)(2), added par. (5).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENTS
Amendment by Pub. L. 107-22 effective July 26, 2001, see section
1(c) of Pub. L. 107-22, set out as a note under section 26 of this
title.
Amendment by Pub. L. 107-16 applicable to taxable years beginning
after Dec. 31, 2001, see section 402(h) of Pub. L. 107-16, set out
as a note under section 72 of this title.
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal
Revenue Code of 1986 to be applied and administered to such years
as if such amendment had never been enacted, see section 901 of
Pub. L. 107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 211(f) of Pub. L. 105-34 provided that:
''(1) In general. - Except as otherwise provided in this
subsection, the amendments made by this section (amending this
section and sections 135 and 6693 of this title) shall take effect
on January 1, 1998.
''(2) Expenses to include room and board. - The amendment made by
subsection (a) shall take effect as if included in the amendments
made by section 1806 of the Small Business Job Protection Act of
1996 (Pub. L. 104-188).
''(3) Eligible educational institution. - The amendment made by
subsection (b)(2) (amending this section) shall apply to
distributions after December 31, 1997, with respect to expenses
paid after such date (in taxable years ending after such date), for
education furnished in academic periods beginning after such date.
''(4) Coordination with education savings bonds. - The amendment
made by subsection (c) (amending section 135 of this title) shall
apply to taxable years beginning after December 31, 1997.
''(5) Estate and gift tax changes. -
''(A) Gift tax changes. - Paragraphs (2) and (5) of section
529(c) of the Internal Revenue Code of 1986, as amended by this
section, shall apply to transfers (including designations of new
beneficiaries) made after the date of the enactment of this Act
(Aug. 5, 1997).
''(B) Estate tax changes. - Paragraph (4) of such section
529(c) shall apply to estates of decedents dying after June 8,
1997.
''(6) Transition rule for pre-august 20, 1996 contracts. - In the
case of any contract issued prior to August 20, 1996, section
529(c)(3)(C) of the Internal Revenue Code of 1986 shall be applied
for taxable years ending after August 20, 1996, without regard to
the requirement that a distribution be transferred to a member of
the family or the requirement that a change in beneficiaries may be
made only to a member of the family.''
Amendment by section 1601(h)(1)(A), (B) of Pub. L. 105-34
effective as if included in the provisions of the Small Business
Job Protection Act of 1996, Pub. L. 104-188, to which it relates,
see section 1601(j) of Pub. L. 105-34, set out as a note under
section 23 of this title.
EFFECTIVE DATE
Section 1806(c) of Pub. L. 104-188, as amended by Pub. L. 105-34,
title XVI, Sec. 1601(h)(1)(C), Aug. 5, 1997, 111 Stat. 1092,
provided that:
''(1) In general. - The amendments made by this section (enacting
this section and amending section 135 of this title) shall apply to
taxable years ending after the date of the enactment of this Act
(Aug. 20, 1996).
''(2) Transition rule. - If -
''(A) a State or agency or instrumentality thereof maintains,
on the date of the enactment of this Act, a program under which
persons may purchase tuition credits or certificates on behalf
of, or make contributions for education expenses of, a designated
beneficiary, and
''(B) such program meets the requirements of a qualified State
tuition program before the later of -
''(i) the date which is 1 year after such date of enactment,
or
''(ii) the first day of the first calendar quarter after the
close of the first regular session of the State legislature
that begins after such date of enactment,
then such program (as in effect on August 20, 1996) shall be
treated as a qualified State tuition program with respect to
contributions (and earnings allocable thereto) pursuant to
contracts entered into under such program before the first date
on which such program meets such requirements (determined without
regard to this paragraph) and the provisions of such program (as
so in effect) shall apply in lieu of section 529(b) of the
Internal Revenue Code of 1986 with respect to such contributions
and earnings.
For purposes of subparagraph (B)(ii), if a State has a 2-year
legislative session, each year of such session shall be deemed to
be a separate regular session of the State legislature.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 72, 135, 221, 222, 530,
6693 of this title.
