“To amend the Internal Revenue Code of 1986 to establish skill savings accounts.”
No CRS summary available for this bill.
This section establishes skill savings accounts under the Internal Revenue Code, allowing eligible employees (i.e., those employed in the United States who are not dependents) to exclude from gross income both employer and employee contributions to the accounts and distributions used exclusively for qualified education expenses (as defined by reference to section 127(c)(1)). Employer contributions are excludable up to $5,250 reduced by any amount excluded under section 127(a)(1), while employee contributions are limited to $10,000 per taxable year; accounts must meet specified trust requirements, including cash contributions only, a qualified trustee, and nonforfeitable interests. Distributions not used for qualified expenses are included in gross income, with an additional 20 percent tax imposed on beneficiaries under age 65. The section also directs the Secretary of the Treasury to issue implementing regulations within one year and extends the excess contributions tax under section 4973 to these accounts.