Legislative update: House passes H.R. 529 education savings plans

House passes H.R. 529 education savings plans

The House today passed, by a bipartisan vote of 401-20, a bill (H.R. 529) to make modifications to 529 education savings plans.

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The expansions to the plans proposed by the bill are reported to be relatively minor and include expanding the program to allow 529 funds to be used for the purchase of computer equipment and internet access and related services used primarily by the 529 beneficiary while the beneficiary is enrolled at an eligible institution—a similar provision had been in place in 2009 and 2010.

H.R. 529 [PDF 251 KB] also includes modifications to the rules governing the manner in which distributions from multiple accounts would be treated for purposes of computing earnings, and the bill would allow beneficiaries that withdraw from school to recontribute 529 distributions without penalty when certain conditions are met.

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