I.R.C. § 529(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).
I.R.C. § 529(b) Qualified Tuition Program —
For purposes of this section—
I.R.C. § 529(b)(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—
I.R.C. § 529(b)(1)(A) —
under which a person—
I.R.C. § 529(b)(1)(A)(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
I.R.C. § 529(b)(1)(A)(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
I.R.C. § 529(b)(1)(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.
I.R.C. § 529(b)(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.
I.R.C. § 529(b)(3) Separate Accounting —
A program shall not be treated as a qualified tuition
program unless it provides separate accounting for each designated
beneficiary.
I.R.C. § 529(b)(4) Limited 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, directly or indirectly, direct
the investment of any contributions to the program (or any earnings
thereon) no more than 2 times in any calendar year.
I.R.C. § 529(b)(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.
I.R.C. § 529(b)(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.
I.R.C. § 529(c) Tax Treatment Of Designated Beneficiaries And Contributors
I.R.C. § 529(c)(1) In General —
Except as otherwise provided in this subsection, no
amount shall be includible in gross income of—
I.R.C. § 529(c)(1)(A) —
a designated beneficiary under a qualified
tuition program, or
I.R.C. § 529(c)(1)(B) —
a contributor to such program on behalf
of a designated beneficiary,
with respect to any distribution or earnings under such
program.
I.R.C. § 529(c)(2) Gift Tax Treatment Of Contributions —
For purposes of chapters 12 and 13—
I.R.C. § 529(c)(2)(A) In General —
Any contribution to a qualified tuition program on
behalf of any designated beneficiary—
I.R.C. § 529(c)(2)(A)(i) —
shall be treated as a completed gift
to such beneficiary which is not a future interest in property, and
I.R.C. § 529(c)(2)(A)(ii) —
shall not be treated as a qualified
transfer under section 2503(e).
I.R.C. § 529(c)(2)(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.
I.R.C. § 529(c)(3) Distributions —
I.R.C. § 529(c)(3)(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.
I.R.C. § 529(c)(3)(B) Distributions For Qualified Higher Education Expenses —
For purposes of this paragraph—
I.R.C. § 529(c)(3)(B)(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.
I.R.C. § 529(c)(3)(B)(ii) Cash Distributions —
In the case of distributions not described in clause
(i), if—
I.R.C. § 529(c)(3)(B)(ii)(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
I.R.C. § 529(c)(3)(B)(ii)(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.
I.R.C. § 529(c)(3)(B)(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.
I.R.C. § 529(c)(3)(B)(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.
I.R.C. § 529(c)(3)(B)(v) Coordination With American Opportunity 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.R.C. § 529(c)(3)(B)(v)(I) —
as provided in section 25A(g)(2), and
I.R.C. § 529(c)(3)(B)(v)(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.
I.R.C. § 529(c)(3)(B)(vi) Coordination With Coverdell Education Savings Accounts —
If, with respect to an individual for any taxable year—
I.R.C. § 529(c)(3)(B)(vi)(I) —
the aggregate distributions to
which clauses (i) and (ii) and section 530(d)(2)(A) apply, exceed
I.R.C. § 529(c)(3)(B)(vi)(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).
I.R.C. § 529(c)(3)(C) Change In Beneficiaries Or Programs
I.R.C. § 529(c)(3)(C)(i) Rollovers —
Subparagraph (A) shall not apply
to that portion of any distribution which, within 60 days of such
distribution, is transferred—
I.R.C. § 529(c)(3)(C)(i)(I) —
to another
qualified tuition program for the benefit of the designated beneficiary,
I.R.C. § 529(c)(3)(C)(i)(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, or
I.R.C. § 529(c)(3)(C)(i)(III) —
before January
1, 2026, to an ABLE account (as defined in section 529A(e)(6)) of the designated
beneficiary or a member of the family of the designated beneficiary.
Subclause (III) shall not apply to so much of a distribution
which, when added to all other contributions made to the ABLE account
for the taxable year, exceeds the limitation under section 529A(b)(2)(B)(i).
I.R.C. § 529(c)(3)(C)(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.
I.R.C. § 529(c)(3)(C)(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.
I.R.C. § 529(c)(3)(D) Special Rule For Contributions Of Refunded Amounts —
In the case of a beneficiary who receives a refund of
any qualified higher education expenses from an eligible educational
institution, subparagraph (A) shall not apply to that portion of any
distribution for the taxable year which is recontributed to a qualified
tuition program of which such individual is a beneficiary, but only
to the extent such recontribution is made not later than 60 days after
the date of such refund and does not exceed the refunded amount.
Editor's Note: Sec. 529(c)(3)(E), below,
after amendment by Pub. L. 117-328,
Div. T, Sec. 126(a), shall apply to distributions after December 31,
2023.
I.R.C. § 529(c)(3)(E) Special Rollover to Roth IRAs From Long-Term Qualified Tuition
Programs
I.R.C. § 529(c)(3)(E)(i) In General —
In the case
of a distribution from a qualified tuition program of a designated
beneficiary which has been maintained for the 15-year period ending
on the date of such distribution, subparagraph (A) shall not apply
to so much the portion of such distribution which—
I.R.C. § 529(c)(3)(E)(i)(I) —
does not exceed the aggregate amount
contributed to the program (and earnings attributable thereto) before
the 5-year period ending on the date of the distribution, and
I.R.C. § 529(c)(3)(E)(i)(II) —
is paid in a direct trustee-to-trustee
transfer to a Roth IRA maintained for the benefit of such designated
beneficiary.
I.R.C. § 529(c)(3)(E)(ii) Limitations
I.R.C. § 529(c)(3)(E)(ii)(I) Annual Limitation —
Clause (i)
shall only apply to so much of any distribution as does not exceed
the amount applicable to the designated beneficiary under section
408A(c)(2) for the taxable year (reduced by the amount of aggregate
contributions made during the taxable year to all individual retirement
plans maintained for the benefit of the designated beneficiary).
I.R.C. § 529(c)(3)(E)(ii)(II) Aggregate Limitation —
This subparagraph
shall not apply to any distribution described in clause (i) to the
extent that the aggregate amount of such distributions with respect
to the designated beneficiary for such taxable year and all prior
taxable years exceeds $35,000.
I.R.C. § 529(c)(4) Estate Tax Treatment
I.R.C. § 529(c)(4)(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.
I.R.C. § 529(c)(4)(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.
I.R.C. § 529(c)(4)(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.
I.R.C. § 529(c)(5) Other Gift Tax Rules —
For purposes of chapters 12 and 13—
I.R.C. § 529(c)(5)(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.
I.R.C. § 529(c)(5)(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.R.C. § 529(c)(5)(B)(i) —
assigned to the same generation as
(or a higher generation than) the old beneficiary (determined in
accordance with section 2651),
and
I.R.C. § 529(c)(5)(B)(ii) —
a member of the family of the old
beneficiary.
I.R.C. § 529(c)(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
a Coverdell education savings 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.
I.R.C. § 529(c)(7) Treatment Of Elementary And Secondary Tuition —
Any reference in this subsection
to the term “qualified higher education expense” shall
include a reference to expenses for tuition in connection with enrollment
or attendance at an elementary or secondary public, private, or religious
school.
I.R.C. § 529(c)(8) Treatment Of Certain Expenses Associated With Registered Apprenticeship
Programs —
Any reference
in this subsection to the term “qualified higher education expense”
shall include a reference to expenses for fees, books, supplies, and
equipment required for the participation of a designated beneficiary
in an apprenticeship program registered and certified with the Secretary
of Labor under section 1 of the National Apprenticeship Act 2 (29 U.S.C. 50).”
I.R.C. § 529(c)(9) Treatment Of Qualified Education Loan Repayments
I.R.C. § 529(c)(9)(A) In General —
Any reference in this subsection to the term “qualified
higher education expense” shall include a reference to amounts
paid as principal or interest on any qualified education loan (as
defined in section 221(d))
of the designated beneficiary or a sibling of the designated beneficiary.
I.R.C. § 529(c)(9)(B) Limitation —
The amount of distributions treated as a qualified higher
education expense under this paragraph with respect to the loans of
any individual shall not exceed $10,000 (reduced by the amount of
distributions so treated for all prior taxable years).
I.R.C. § 529(c)(9)(C) Special Rules For Siblings Of The Designated Beneficiary
I.R.C. § 529(c)(9)(C)(i) Separate Accounting —
For purposes of subparagraph (B) and subsection (d), amounts treated as
a qualified higher education expense with respect to the loans of
a sibling of the designated beneficiary shall be taken into account
with respect to such sibling and not with respect to such designated
beneficiary.
I.R.C. § 529(c)(9)(C)(ii) Sibling Defined —
For purposes of this paragraph, the term “sibling”
means an individual who bears a relationship to the designated beneficiary
which is described in section 152(d)(2)(B).
Editor's Note: Sec. 529(d), below, before
amendment by Pub. L. 117-328,
Div. T, Sec. 126(c)(1), shall apply to distributions before December
31, 2023.
I.R.C. § 529(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.
Editor's Note: Sec. 529(d), below, after
amendment by Pub. L. 117-328,Div.
T, Sec. 126(c)(1), shall apply to distributions after December 31,
2023.
I.R.C. § 529(d) Reports
I.R.C. § 529(d)(1) In General —
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 paragraph
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.
I.R.C. § 529(d)(2) Rollover Distributions —
In the case of any distribution described in subsection
(c)(3)(E), the officer or employee having control of the qualified
tuition program (or their designee) shall provide a report to the
trustee of the Roth IRA to which the distribution is made. Such report
shall be filed at such time and in such manner as the Secretary may
require and shall include information with respect to the contributions,
distributions, and earnings of the qualified tuition program as of
the date of the distribution described in subsection (c)(3)(A), together
with such other matters as the Secretary may require.
I.R.C. § 529(e) Other Definitions And Special Rules —
For purposes of this section—
I.R.C. § 529(e)(1) Designated Beneficiary —
The term “designated beneficiary” means—
I.R.C. § 529(e)(1)(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,
I.R.C. § 529(e)(1)(B) —
in the case of a change in beneficiaries
described in subsection (c)(3)(C), the individual who is the new
beneficiary, and
I.R.C. § 529(e)(1)(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.
I.R.C. § 529(e)(2) Member Of Family —
The term “member of the family” means,
with respect to any designated beneficiary—
I.R.C. § 529(e)(2)(A) —
the spouse of such beneficiary;
I.R.C. § 529(e)(2)(B) —
an individual who bears a relationship
to such beneficiary which is described in subparagraphs (A) through
(G) of section 152(d)(2);
I.R.C. § 529(e)(2)(C) —
the spouse of any individual described
in subparagraph (B); and
I.R.C. § 529(e)(2)(D) —
any first cousin of such beneficiary.
I.R.C. § 529(e)(3) Qualified Higher Education Expenses —
I.R.C. § 529(e)(3)(A) In General —
The term “qualified higher
education expenses” means—
I.R.C. § 529(e)(3)(A)(i) —
tuition, fees, books, supplies,
and equipment required for the enrollment or attendance of a designated
beneficiary at an eligible educational institution,
I.R.C. § 529(e)(3)(A)(ii) —
expenses for special needs services
in the case of a special needs beneficiary which are incurred in
connection with such enrollment or attendance, and
I.R.C. § 529(e)(3)(A)(iii) —
expenses for the purchase of computer or peripheral equipment
(as defined in section 168(i)(2)(B)),
computer software (as defined in section
197(e)(3)(B)), or Internet access and related services,
if such equipment, software, or services are to be used primarily
by the beneficiary during any of the years the beneficiary is enrolled
at an eligible educational institution.
Clause (iii) shall not include expenses for computer
software designed for sports, games, or hobbies unless the software
is predominantly educational in nature. The amount of cash distributions
from all qualified tuition programs described in subsection (b)(1)(A)(ii)
with respect to a beneficiary during any taxable year shall, in the
aggregate, include not more than $10,000 in expenses described in
subsection (c)(7) incurred during the taxable year.
I.R.C. § 529(e)(3)(B) Room And Board Included For Students Who Are At Least Half-Time
I.R.C. § 529(e)(3)(B)(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.
I.R.C. § 529(e)(3)(B)(ii) Limitation —
The amount treated as qualified higher education expenses
by reason of clause (i) shall not exceed—
I.R.C. § 529(e)(3)(B)(ii)(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
I.R.C. § 529(e)(3)(B)(ii)(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.
I.R.C. § 529(e)(4) Application Of Section 514 —
An interest in a qualified tuition program shall not
be treated as debt for purposes of section 514.
I.R.C. § 529(e)(5) Eligible Educational Institution —
The term “eligible educational institution”
means an institution—
I.R.C. § 529(e)(5)(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
I.R.C. § 529(e)(5)(B) —
which is eligible to participate in
a program under title IV of such Act.
I.R.C. § 529(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.
(Aug. 20, 1996, Pub.
L. 104-188, title I, Sec. 1806(a), 110 Stat. 1755; Pub. L. 105-34, title II, XVI, Sec.
211, 1601(h)(1), Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title VI, Sec.
6004(c), July 22, 1998, 112 Stat 685; Pub.
L. 106-554, title III, Sec. 319, Dec. 21, 2000,
114 Stat. 2763; Pub. L. 107-16,
title IV, Sec. 402, June 7, 2001, 115 Stat. 38; Pub. L. 107-22, Sec. 1, July 26,
2001, 115 Stat. 196; Pub. L. 107-147,
title IV, Sec. 417(11), Mar. 9, 2002, 116 Stat. 21; Pub. L. 108-311, title II, IV,
Sec. 207(21), 406(a), Oct. 4, 2004, 118 Stat. 1166; Pub. L. 109-135, title IV, Sec.
412, Dec. 21, 2005, 119 Stat. 2577; Pub.
L. 109-280, title XIII, Sec. 1304(b), Aug. 17, 2006,
120 Stat. 780; Pub. L. 111-5,
div. B, title I, Sec. 1005(a), Feb. 17, 2009, 123 Stat. 115; Pub. L. 113-295, Div. B, Sec. 105(a),
Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-113,
Div. Q, title III, Sec. 302; Pub. L. 115-97,
title I, Sec. 11025(a), 11032(a), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title I, Sec.
101(l)(15), title IV, Sec. 401(a)(127), (128); Pub.
L. 115-141, Div. U, title IV, Sec. 401(a)(127)-(128), Mar.
23, 2018, 132 Stat. 348; Pub. L. 116-94, Div. O, title III, Sec.
302(a), (b)(1), Dec. 20, 2019; Pub. L. 117-328,
Div. T, title I, Sec. 126(a), 126(c)(1)-(3), Dec. 29, 2022.)
BACKGROUND NOTES
Amendments to Part
2001-Pub.
L. 107-16, Sec. 402(a)(4)(D), amended the heading
of Part VIII by striking “State”.
1997--Pub.
L. 105-34, Sec. 211(e)(1) amended the heading of
Part VIII. Prior to amendment it read as: “Qualified State Tuition
Programs”.
1996--Pub. L. 104-188,
title I, Subtitle H, 1806(a), Aug. 20, 1996, added Part VIII.
AMENDMENTS
2022 —Subsec.
(c)(3)(E). Pub. L. 117-328, Div.
T, Sec. 126(a), amended by adding new subpara (E).
Subsec. (d)(1). Pub. L. 117-328, Sec. 126(c)(1) and Sec.
126(c)(2) substituted “(1) In General.—Each officer”
for “Each officer” and by substituted “by this paragraph”
for “by this subsection”. Prior to this amendment, subsec.
(d)(1) read:
“(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.”
Subsec. (d)(2). Pub. L. 117-328, Sec. 126(c)(3) added new
paragraph (2).
2019 —
Subsec. (c)(8), (9). Pub. L. 116-94,
Div. O, Sec. 302(a), (b)(1), amended subsec. (c) by adding new par.
(8) and (9).
2018--Subsec.(c)(6). Pub. L. 115-141, Div. U, Sec. 401(a)(127),
amended par. (6) by substituting “a Coverdell” for “an
Coverdell”.
Subsec. (c)(3)(B)(v). Pub.
L. 115-141, Div. U, Sec. 101(l)(15), amended the heading
of clause (v) by substituting “American Opportunity” for “Hope”.
Subsec. (e)(3)(A)(i). Pub.
L. 115-141, Div. U, Sec. 401(a)(128)(A), amended clause
(i) by substituting a comma for the semicolon at the end.
Subsec. (e)(3)(A)(ii). Pub.
L. 115-141, Div. U, Sec. 401(a)(128)(B), amended clause
(ii) by adding “, and” at the end.
2017 - Subsec. (c)(3)(C)(i). Pub. L. 115-97, Sec. 11025(a),
amended clause (i) by striking “or” at the end of subclause
(I), by substituting “, or” for the period at the end
of subclause (II), by adding new subclause (III), and by adding the
sentence at the end.
Subsec. (c)(7). Pub.
L. 115-97, Sec. 11032(a)(1), amended subsec. (c) by adding
par. (7).
Subsec. (e)(3)(A). Pub. L. 115-97, Sec. 11032(a)(2),
amended par. (A) by adding the sentence at the end.
2015 - Subsec. (c)(3)(D). Pub. L. 114-113, Div. Q, Sec. 302(b)(1),
amended par. (3) by striking subpar. (D). Before being struck, it
read as follows:
“(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.”
Subsec. (c)(3)(D). Pub.
L. 114-113, Div Q, Sec. 302(c)(1), amended par. (3) by adding
a new subpar. (D).
Subsec. (e)(3)(A)(iii). Pub.
L. 114-113, Div. Q, Sec. 302(a), amended clause (iii). Before
amendment, it read as follows:
“(iii) expenses paid or incurred in 2009
or 2010 for the purchase of any computer technology or equipment (as
defined in section 170(e)(6)(F)(i)) or Internet access and related
services, if such technology, equipment, or services are to be used
by the beneficiary and the beneficiary's family during any of the
years the beneficiary is enrolled at an eligible educational institution.”
2014 - Subsec. (b)(4). Pub. L. 113-295, Div. B, Sec. 105(a),
amended par. (4) by substituting “No” for “Limited”
in the heading and by substituting “may, directly or indirectly,
direct the investment of any contributions to the program (or any
earnings thereon) no more than 2 times in any calendar year”
for “may not directly or indirectly direct the investment of
any contributions to the program (or any earnings thereon).”
2009 - Subsec. (e)(3)(A)(i)-(iii). Pub. L. 111-5, Div. B, Sec. 1005(a),
amended subpar. (A) by striking “and” at the end of clause
(i), by striking the period at the end of clause (ii), and by adding
clause (iii) and the flush material at the end.
2006 - Subsec. (f). Pub. L. 109-280, Sec. 1304(b),
added subsec. (f).
2005 - Subsec. (c)(6). Pub. L. 109-135, Sec. 412(ee)(3),
amended par. (6) by substituting “Coverdell education savings account"
for “education individual retirement account”.
2004 - Subsec. (c)(5)(B). Pub. L. 108-311, Sec. 406(a),
amended subpar. (B). Before amendment it read as follows:
“(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)
only if the new beneficiary is a generation below the generation of
the old beneficiary (determined in accordance with section 2651).”
Subsec. (e)(2)(B). Pub. L. 108-311, Sec. 207(21),
amended subpar. (B) by substituting “subparagraphs (A) through (G)
of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.
2002 - Subsec. (e)(3)(B)(i). Pub. L. 107-147, Sec. 417(11),
amended clause (i) by substituting “subsection (b)(6)” for “subsection
(b)(7)”.
2001 - Subsec. (c)(3)(B)(vi). Pub. L. 107-22, Sec. 1(b)(3)(C),
amended the heading of clause (vi) by substituting “Coverdell education
savings” for “education individual retirement”.
Section 529. Pub. L. 107-16, Sec. 402(a)(4)(D),
amended the heading of Sec. 529 by striking “State”.
Sec. 529. Pub.
L. 107-16, Sec. 402(a)(4)(A), amended sec. 529 by
substituting “qualified tuition” for “qualified State tuition” each
place it appeared.
Subsec. (b). Pub. L. 107-16, Sec. 402(a)(4)(C),
amended the heading of subsec. (b) by substituting “qualified tuition"
for “qualified State tuition”.
Subsec. (b)(1). Pub. L. 107-16, Sec. 402(a)(1),
amended par. (1) by inserting “or by 1 or more eligible educational
institutions” after “maintained by a State or agency or instrumentality
thereof ‘’ in the matter preceding subparagraph (A), and by adding
at the flush sentence at the end.
Subsec. (b)(1)(A)(ii). Pub. L. 107-16, Sec. 402(a)(2),
amended clause (ii) by inserting “in the case of a program established
and maintained by a State or agency or instrumentality thereof,”
before “may make”.
Subsec. (b)(3). Pub. L. 107-16, Sec. 402(a)(3)(A),
struck par. (3). Before being struck it read as follows:
“(3) Refunds
“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.”
Subsec. (b)(4)-(7). Pub. L. 107-16, Sec. 402(a)(3)(A),
redesignated par. (4)-(7) as par. (3)-(6), respectively.
Subsec. (c)(3)(B). Pub. L. 107-16, Sec. 402(b)(1),
amended subpar. (B). Before amendment it read as follows:
“(B) In-kind distributions
“Any benefit furnished to a
designated beneficiary under a qualified tuition program shall be
treated as a distribution to the beneficiary.”
Subsec. (c)(3)(C). Pub. L. 107-16, Sec. 402(c)(3),
amended the heading of subpar. (C) by inserting “or programs” after
“beneficiaries”.
Subsec. (c)(3)(C)(i). Pub. L. 107-16, Sec. 402(c)(1),
amended clause (i) by substituting “transferred-
“(I) to another qualified tuition
program for the benefit of the designated beneficiary, or
“(II) to the credit”
for “transferred to the credit”.
Subsec. (c)(3)(C)(iii). Pub. L. 107-16, Sec. 402(c)(2),
added clause (iii).
Subsec. (c)(3)(D)(ii). Pub. L. 107-16, Sec. 402(g)(1),
amended clause (ii) by inserting “except to the extent provided by
the Secretary,” before “all distributions.
Subsec. (c)(3)(D)(iii). Pub. L. 107-16, Sec. 402(g)(2),
amended clause (iii) by inserting “except to the extent provided by
the Secretary,” before “the value”.
Subsec. (c)(6). Pub. L. 107-16, Sec. 402(a)(3)(B),
added par. (6).
Subsec. (e)(2)(B)-(D). Pub. L. 107-16, Sec. 402(d),
struck “and” at the end of subpar. (B), substituted “; and” for the
period at the end of subpar. (C), and added subpar. (D).
Subsec. (e)(3)(A). Pub. L. 107-16, Sec. 402(f),
amended subpar. (A). Before amendment it read as follows:
“(A) In general.--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.”
Subsec. (e)(3)(B)(ii). Pub. L. 107-16, Sec. 402(e),
amended clause (ii). Before amendment it read as follows:
“(ii) Limitation.--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.”
2000 - Subsec. (e)(3)(B). Pub. L. 106-554, Sec. 319(5),
amended the heading by striking “under guaranteed plans” after “students”.
1998 - Subsec. (c)(3)(A). Pub. L. 105-206, Sec. 6004(c)(2),
amended subpar. (A) by substituting “section 72” for “section 72(b)”.
Subsec. (e)(2). Pub. L. 105-206, Sec. 6004(c)(3),
amended par. (2). Prior to amendment it read as follows:
“(2) Member of family.--
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),
amended par. (5) by inserting “directly or indirectly” after “may
not”.
Subsec. (c)(2). Pub. L. 105-34, Sec. 211(b)(3)(A)(i),
amended par. (2). Prior to amendment it read as follows:
“(2) Contributions
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),
amended subpar. (A) by substituting “section 72(b)” for “section 72”.
Subsec. (c)(4). Pub. L. 105-34, Sec. 211(b)(3)(b),
amended par. (4). Prior to amendment it read as follows:
“(4) Estate tax inclusion
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 par. (5). Prior to amendment it read as follows:
“(5) Special rule for applying section 2503(e)
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). Prior to amendment it 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),
amended subpar. (B) by substituting “subsection (c)(3)(C)” for “subsection
(c)(2)(C)”.
Subsec. (e)(1)(C). Pub. L. 105-34, Sec. 1601(h)(1)(B),
amended subpar. (C) by inserting “(or agency or instrumentality thereof)"
after “local government”.
Subsec. (e)(2). Pub. L. 105-34, Sec. 211(b)(1),
amended par. (2). Prior to amendment it read as follows:
“(2) Member of family
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 par. (3). Prior to
amendment it read as follows:
“(3) Qualified higher education expenses
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
DATE OF 2022 AMENDMENTS
Amendments by Pub. L. 117-328, Div. T, Sec. 126(a), (c)(1)-(3)
apply to distributions after December 31, 2023.
EFFECTIVE DATE OF 2019
AMENDMENTS
Amendments by Pub. L. 116-94, Div. O, Sec. 302(a), (b)(1),
applicable to distributions made after December 31, 2018.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L.
115-141, Div. U, Sec. 401(a)(127), effective March 23, 2018.
Amendment by Pub. L.
115-141, Div. U, Sec. 401(a)(128), effective March 23, 2018.
Amendment by Pub. L.
115-141, Div. U, Sec. 101(l)(15), effective as if included
in the provision of Protecting Americans from Tax Hikes Act of 2015
[Pub. L. 114-113] to which it
relates.
Amendments by Pub. L.
115-141, Div. U, Sec. 401(a), effective March 23, 2018.
EFFECTIVE DATE OF 2017
AMENDMENTS
Amendments by Pub. L. 115-97, Sec. 11025(a),
effective for distributions after the date of the enactment of this
Act [Enacted: Dec. 22, 2017].
Amendments by Pub. L. 115-97, Sec. 11032(a),
effective for distributions made after December 31, 2017.
EFFECTIVE DATE OF 2015
AMENDMENTS
Amendment by Pub. L. 114-113, Div. Q, Sec. 302(b)(1),
effective for distributions after December 31, 2014.
Amendment by Pub. L.
114-113, Div. Q, Sec. 302(c)(1), effective with respect
to refunds of qualified higher education expenses after December 31,
2014. Pub. L. 114-113, Div.
Q, Sec. 302(c)(2)(B), provided the following transition rule:
“(B) TRANSITION RULE.—In the case of
a refund of qualified higher education expenses received after December
31, 2014, and before the date of the enactment of this Act, section 529(c)(3)(D) of the Internal Revenue
Code of 1986 (as added by this subsection) shall be applied
by substituting “not later than 60 days after the date of the
enactment of this subparagraph” for “not later than 60
days after the date of such refund”.”
Amendment by Pub. L.
114-113, Div. Q, Sec. 302(a), effective for taxable years
beginning after December 31, 2014.
EFFECTIVE
DATE OF 2014 AMENDMENTS
Amendments
by Pub. L. 113-295,
Div. B, Sec. 105(a), effective for taxable years beginning after December
31, 2014.
EFFECTIVE
DATE OF 2009 AMENDMENTS
Amendments
by Sec. 1005(a) of Pub. L. 111-5,
Div. B, effective for expenses paid or incurred after December 31,
2008.
EFFECTIVE
DATE OF 2006 AMENDMENTS
Amendment
by Sec. 1304(b) of Pub. L. 109-280 applicable
on the date of the enactment of this Act [Enacted: Aug. 17, 2006].
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendment by Sec. 412(ee)(3) of Pub. L. 109-135 applicable on the
date of the enactment of this Act [Enacted: Dec. 21, 2005].
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendment by Sec. 207(21) of Pub. L. 108-311 applicable to taxable
years beginning after December 31, 2004.
Amendment by Sec. 406(a) of Pub. L. 108-311 applicable as if
included in the provision of the Taxpayer Relief Act of 1997 [Sec.
211] to which it relates [effective: transfers after Aug. 5, 1997].
EFFECTIVE DATE OF 2002 AMENDMENTS
Amendment by Sec. 417(11) of Pub. L. 107-147 applicable on the
date of the enactment of this Act [enacted: Mar. 9, 2002].
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendment by Sec. 1 of Pub.
L. 107-22 applicable on the date of enactment of
this Act [Enacted: July 26, 2001].
Amendments by Sec. 402 of Pub. L. 107-16 applicable to taxable
years beginning after December 31, 2001.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, Sec. 101(a),
and struck by Pub. L. 112-240,
Sec. 101(a)(1) (effective for taxable, plan, or limitation
years beginning after Dec. 31, 2012, and estates of decedents dying,
gifts made, or generation skipping transfers after Dec. 31, 2012),
provided that:
“(a) IN GENERAL.--All provisions of, and amendments
made by, this Act shall not apply--
“(1) to taxable, plan, or limitation
years beginning after December 31, 2012, or
“(2) in the case of title V,
to estates of decedents dying, gifts made, or generation skipping
transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal
Revenue Code of 1986 and the Employee Retirement Income Security Act
of 1974 shall be applied and administered to years, estates, gifts,
and transfers described in subsection (a) as if the provisions and
amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply
to section 803 (relating to no federal income tax on restitution received
by victims of the Nazi regime or their heirs or estates).”
QUALIFIED TUITION PROGRAMS
Section 1304(a) of Pub.
L. 109-280 provided that:
“(a) Permanent Extension of Modifications- Section
901 of the Economic Growth and Tax Relief Reconciliation Act of
2001 (relating to sunset provisions) shall not apply to section
402 of such Act (relating to modifications to qualified tuition
programs).”
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by Sec. 6004(c) of Pub. L. 105-206 applicable as if
included in the provisions of the Taxpayer Relief Act of 1997 to which
they relate [Effective Date of Pub.
L. 105-34, Sec. 211(b)(2): 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].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 211 of Pub. L. 105-34 effective on January
1, 1998, except:
(2) Amendments by Sec. 211(a)
of Pub. L. 105-34 effective
as if included in the amendments made by section 1806 of the Small
Business Job Protection Act of 1996.
(3) Amendments by Sec. 211(b)(2)
of Pub. L. 105-34 applicable
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) 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.
(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.
EFFECTIVE DATE
Section 1806(c)(1) of Pub.
L. 104-188, as amended by Pub. L. 105-34, Sec. 1601(h)(1)(C),
provided that: “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 enactment of this Act [Aug. 20, 1996]."
Section 1806(c)(2) provided the following transition rule:
“(2) Transition rule.--If--
(A) a State or agency or instrumentality
thereof maintains, on the date of the enactment of this Act [Aug.
20, 1996], 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.”