H.R.3839 - Savings Account for a Valued Education Act of 1989101st Congress (1989-1990)
|Sponsor:||Rep. Smith, Christopher H. [R-NJ-4] (Introduced 11/21/1989)|
|Committees:||House - Ways and Means|
|Latest Action:||House - 11/21/1989 Referred to the House Committee on Ways and Means. (All Actions)|
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Summary: H.R.3839 — 101st Congress (1989-1990)All Information (Except Text)
Introduced in House (11/21/1989)
Savings Account for a Valued Education Act of 1989 - Amends the Internal Revenue Code to allow an individual income tax deduction for contributions to a savings account established to pay the educational expenses (tuition, supplies, meals, and lodging) of the taxpayer's child or certain other relatives at an institution of higher education or a vocational school. Limits the deduction to $1,500 annually (adjusted for inflation) for each account. Disallows the deduction for contributions to an account maintained for any individual aged 19 or older. Requires any account balance to be distributed after the beneficiary attains age 30.
Permits an exclusion from the gross income of the contributor or the beneficiary of account distributions used to pay educational expenses of the latter.
Exempts an account from taxation (except for the tax on unrelated business income of a charitable organization), unless a contributor or the beneficiary engages in specified prohibited transactions in connection with it.
Imposes a ten percent surtax on distributions not used for educational purposes.
Requires the account trustee to report to the Secretary of the Treasury and to the account's beneficiary concerning the account. Imposes a penalty for failure to report.
Allows taxpayers who do not otherwise itemize deductions to deduct for contributions to an education savings account.
Imposes penalty taxes in connection with excess contributions or prohibited transactions associated with an account.
Requires the Secretary to: (1) develop and implement activities to support participation in the Savings Account for a Valued Education program; (2) encourage employees to participate in payroll deductions for such accounts; and (3) encourage participation in programs to provide needy youngsters with access to such accounts.