To make qualified tuition programs permanent and to amend the Internal Revenue Code of 1986 to allow a deduction for amounts contributed to qualified tuition programs.

June 20, 2005

Mr. ROGERS of Michigan introduced the following bill; which was referred to the Committee on Ways and Means

To make qualified tuition programs permanent and to amend the Internal Revenue Code of 1986 to allow a deduction for amounts contributed to qualified tuition programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Securing Affordable Vocational and Collegiate Education (SAVE) Act of 2005'.

SEC. 2. REPEAL OF THE SUNSET WITH RESPECT TO QUALIFIED TUITION PROGRAMS.

Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to section 402 of such Act.

SEC. 3. DEDUCTION FOR PAYMENTS TO QUALIFIED TUITION PROGRAMS.

(a) In General- Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

`SEC. 224. PAYMENTS TO QUALIFIED TUITION PROGRAMS.

`(a) Allowance of Deduction- In the case of an individual, there shall be allowed as a deduction an amount equal to the amount paid by the taxpayer during the taxable year to any qualified tuition program (as defined in section 529) for the benefit of any designated beneficiary (as defined in such section).

`(b) Dollar Limitation- The deduction allowed by subsection (a) for the taxable year shall not exceed $5,000 ($10,000 in the case of a joint return).'.

(b) Deduction Allowed in Computing Adjusted Gross Income- Section 62(a) of such Code is amended by redesignating paragraph (19) (relating to costs involving discrimination suits, etc.) as paragraph (20) and by inserting after paragraph (20) the following new paragraph:

`(21) PAYMENTS TO QUALIFIED TUITION PROGRAMS- The deduction allowed by section 224.'.

(c) Conforming Amendment- The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as an item relating to section 225 and by inserting after the item relating to section 223 the following new item:

`Sec. 224. Payments to qualified tuition programs.'.

(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2004.

END