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House bill would make 529 contributions eligible for saver's credit
(March 12, 2009) - A bill (H.R. 1351) has been introduced into the U.S. House of Representatives that would make contributions to a 529 plan eligible for the saver's credit. The saver's credit is a non-refundable federal tax credit worth as much as 50 percent of the first $2,000 of contributions, targeted to low- and moderate-income individuals.
The saver's credit is currently available only on contributions to IRAs and 401(k)s and similar workplace retirement programs. In addition to income requirements, eligibility for the credit is restricted to taxpayers 18 and over who do not meet the definition of a full-time student and who are not claimed as the dependents of others.
H.R. 1351 would also make permanent the inclusion of computer purchases as a section 529 qualified higher education expense and make permanent the ability to direct two investment changes in a 529 account in a calendar year.
H.R. 1351 was introduced by Reps Earl Pomeroy (D-ND) and Pat Tibieri (R-OH) and co-sponsored by Reps Kendrick Meek (D-FL), Lynn Jenkins (R-KS), and Ron Kind (D-WI).