Savings Enhancement for Education in College Act

“(2) Contributions to qualified tuition programs

“(A) In general—The term qualified savings contribution includes the amount of any purchase or contribution described in paragraph (1)(A) of section 529(b) to a qualified tuition program (as defined in such section) if—

“(i) the taxpayer has the power to authorize distributions and otherwise administer the account, and

“(ii) the designated beneficiary of such purchase or contribution is the taxpayer, the taxpayer’s spouse, or an individual with respect to whom the taxpayer is allowed a deduction under section 151.

“(B) Limitation based on compensation—The amount treated as a qualified savings contribution by reason of subparagraph (A) for any taxable year shall not exceed the sum of—

“(i) the compensation (as defined in section 219(f)(1)) includible in the taxpayer’s gross income for the taxable year, and

“(ii) the amount excluded from the taxpayer’s gross income under section 112 (relating to combat pay) for such year.

“(C) Determination of adjusted gross income—Solely for purposes of determining the applicable percentage under subsection (b) which applies with respect to the amount treated as a qualified savings contribution by reason of subparagraph (A), adjusted gross income (determined without regard to this subparagraph) shall be increased by the excess (if any) of—

“(i) the social security benefits received during the taxable year (within the meaning of section 86), over

“(ii) the amount included in gross income for such year under section 86.”

“127A. Employer contributions to qualified tuition programs

“(a) In general—Gross income of an employee does not include amounts paid by the employer as contributions to a qualified tuition program held by the employee or spouse of the employee if the contributions are made pursuant to a program which is described in subsection (b).

“(b) Maximum exclusion—The amount excluded from the gross income of an employee under this section for the taxable year shall not exceed $600.

“(c) Qualified tuition assistance program—For purposes of this section, a qualified tuition assistance program is a separate written plan of an employer for the benefit of such employer's employees—

“(1) under which the employer makes matching contributions to qualified tuition programs of—

“(A) such employees,

“(B) their spouses, or

“(C) any individual with respect to whom such an employee or spouse—

“(i) is allowed a deduction under section 151, and

“(ii) has the power to authorize distributions and otherwise administer such individual's account under the qualified tuition program, and

“(2) which meets requirements similar to the requirements of paragraphs (2), (3), (4), (5), and (6) of section 127(b).

“(d) Definitions and special rules—For purposes of this section—

“(1) Qualified tuition program—The term qualified tuition program means a qualified tuition program as defined in section 529(b).

“(2) Employee and employer—The terms employee and employer shall have the meaning given such terms by paragraphs (2) and (3), respectively, of section 127(c).

“(3) Applicable rules—Rules similar to the rules of paragraphs (4), (5), (6), and (7) of section 127(c) shall apply.

“(e) Inflation adjustment

“(1) In general—In the case of any taxable year beginning in a calendar year after 2013, the $600 amount contained in subsection (b)(1) shall be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2012” for “calendar year 1992” in subparagraph (B) thereof.

“(f) Cross reference—For reporting and recordkeeping requirements, see section 6039D.”