[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5554 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5554
To amend the Internal Revenue Code of 1986 to permit distributions from
529 accounts for medical expenses of account owners who are veterans
with disability ratings of greater than 50 percent.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 18, 2014
Mr. Bishop of New York (for himself and Mr. Rangel) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to permit distributions from
529 accounts for medical expenses of account owners who are veterans
with disability ratings of greater than 50 percent.
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 ``Helping Wounded Warriors Cover
Medical Expenses Act''.
SEC. 2. DISTRIBUTIONS FROM 529 ACCOUNTS FOR MEDICAL EXPENSES OF ACCOUNT
OWNERS WHO ARE VETERANS WITH DISABILITY RATINGS OF
GREATER THAN 50 PERCENT.
(a) Exemption From 529 Penalty.--Section 529(c)(6) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(6) Additional tax.--
``(A) In general.--The tax imposed by section
530(d)(4) shall apply to any payment or distribution
from a qualified tuition program in the same manner as
such tax applies to a payment or distribution from a
Coverdell education savings account. This paragraph
shall not apply to any payment or distribution in any
taxable year beginning before January 1, 2004, which is
includible in gross income but used for qualified
higher education expenses of the designated
beneficiary.
``(B) Exception.--Subparagraph (A) shall not apply
to any payment or distribution from a qualified tuition
program to the owner of an account under such program
if--
``(i) at the time of such payment or
distribution, the owner of such account is a
veteran whom the Secretary of Veterans Affairs
determines has a service-connected disability
rated at 50 percent or more, and
``(ii) in lieu of using such payment or
distribution for qualified higher education
expenses, such payment or distribution is used
for medical care (as defined in section 213(d))
for such owner.
``(C) Coordination with medical expense
deduction.--For purposes of determining the amount of
the deduction under section 213, any payment or
distribution to which subparagraph (B) applies shall
not be treated as an expense paid for medical care.''.
(b) Exclusion From Income.--Section 72(e)(6) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(6) Extension of paragraph (2)(B) to qualified tuition
programs and coverdell education savings accounts.--
``(A) In general.--Notwithstanding any other
provision of this subsection, paragraph (2)(B) shall
apply to amounts received under a qualified tuition
program (as defined in section 529(b)) or under a
Coverdell education savings account (as defined in
section 530(b)). The rule of paragraph (8)(B) shall
apply for purposes of this paragraph.
``(B) Exception.--In the case of an amount received
under a qualified tuition program (as defined in
section 529(b)) which is not subject to the penalty
under subparagraph (A) of section 529(c)(6) by reason
of subparagraph (B) thereof--
``(i) subparagraph (A) of this paragraph
shall not apply, and
``(ii) the amount received which, but for
this subparagraph, would be treated as income
on the contract shall be treated as investment
in the contract.''.
(c) Effective Date.--The amendments made by this section shall
apply to payments and distributions after the date of the enactment of
this Act.
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