Two lawmakers introduced a bi-partisan bill Tuesday that would make permanent the tax exemption on qualified withdrawals from 529 college savings plans.
Representatives Melissa Hart (R-Pa.) and Earl Pomroy (D-N.D.), both members of the House Ways & Means Committee, seek to eliminate the sunset provision on reforms enacted in 2001 that mitigate the rising costs of college education through tax-free withdrawals. The provision is scheduled to sunset after 2010.
The Hart-Pomroy Bill aims to ensure that current 529 plan participants will not be punished unnecessarily for making good investment decisions today to help their children achieve their educational goals in the future.
The College Savings Foundation, a Washington, D.C.-based not-for-profit organization, applauded the move as an "auspicious beginning" in the fight to make the 2001 reforms permanent.
"We are hopeful that, in light of today's auspicious beginning, Congress will move promptly in the months to come to make the 2001 529 plan reforms permanent," said Chairman David Pearlman. "Quick action will ensure that families' efforts to save for college can continue uninterrupted."