OFFICIALS LEGISLATION INTEREST GROUPS PUBLIC STATEMENTS COMMITTEES VETOES

Statements on Introduced Bills and Joint Resolutions

Floor Speech

Date: Sept. 18, 2014
Location: Washington, DC
Issues: Taxes Higher Education

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By Mr. MCCONNELL:

S. 2882. A bill to amend the Internal Revenue Code of 1986 to allow certain individuals a credit against income tax for contributions to 529 plans, and for other purposes; to the Committee on Finance.

Mr. McCONNELL. Mr. President, today I am proud to offer legislation that will make it easier for American families to pay for their child's higher education. This legislation is the Enhanced 529-Setting Aside for a Valuable Education, or Enhanced 529-SAVE, Act. This measure will make the 529 college savings plans more accessible to lower and middle-income families.

A 529 plan is a tax-advantaged savings plan that is designed to encourage Americans to save for future college costs. 529 plans can be sponsored by states, state agencies, or educational institutions and they are authorized by Section 529 of the Internal Revenue Code. I championed efforts to ensure that 529 plans would be 100 percent tax-free at the Federal level. In 2001, I authored the Setting Aside for Valuable Education, or SAVE, Act, which was included in a tax package that became law. In 2006, I helped make the tax benefits under these accounts permanent.

The Enhanced 529-SAVE Act will make 529 plans more accessible by encouraging employers to contribute to an employee's 529 plan. My bill would exclude up to $600 of an employer's contribution from an employee's gross income. This will help families and individuals save more for higher education expenses.

The Enhanced 529-SAVE Act will also create an incentive for lower-income families and individuals to save money for college by allowing the individual that contributes to the 529 plan to qualify for the Saver's Credit, which is an income-based, non-refundable tax credit up to $4,000.

The Enhanced 529-SAVE Act is similar to H.R. 529, introduced in the House of Representatives by Congresswoman Lynn Jenkins of Kansas. I want to commend her for her leadership on this important issue. I urge my colleagues to consider and pass the Enhanced 529-SAVE Act, and I look forward to its eventual passage.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

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