Please wait while the document is loaded.

A02004
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1385
Session of
2017
INTRODUCED BY B. MILLER, MILNE, ZIMMERMAN, QUIGLEY, EVANKOVICH,
SANKEY, KAUFER, HICKERNELL AND BLOOM, MAY 18, 2017
REFERRED TO COMMITTEE ON FINANCE, MAY 18, 2017
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in personal income tax, further providing for
classes of income.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 303(a.7) of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
to read:
Section 303. Classes of Income.--* * *
(a.7) The following apply:
(1) An amount paid as a contribution into a qualified 529
advisor sold plan or a qualified tuition program under Chapter 3
of the act of April 3, 1992 (P.L.28, No.11), known as the
Tuition Account Programs and College Savings Bond Act, shall be
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
deductible from taxable income on the annual personal income tax
return. Beginning in the year following the inception of a
Pennsylvania qualified 529 advisor sold plan, amounts paid as
contributions to qualified 529 advisor sold plans other than the
Pennsylvania qualified 529 advisor sold plan shall not be
deductible from taxable income on the personal income tax
return. The amount paid as a contribution to a qualified tuition
program allowable as a deduction under this subsection shall be
subject to an annual limitation not to exceed the threshold for
exclusion from gifts as provided in section 2503(b) of the
Internal Revenue Code of 1986, as amended, per designated
beneficiary. The deduction shall not result in taxable income
being less than zero.
(2) (i) The following shall not be subject to tax under
this article:
(A) Any amount distributed from a qualified tuition program
that is excludable from tax under section 529(c)(3)(B) of the
Internal Revenue Code of 1986, as amended.
(B) Any rollover that is excludable from tax under section
529(c)(3)(C) of the Internal Revenue Code of 1986, as amended.
The exception under this clause does not apply to a rollover
from a qualified tuition program under Chapter 3 of the Tuition
Account Programs and College Savings Bond Act.
(C) Undistributed earnings on a qualified tuition program.
(ii) A change in designated beneficiaries under section
529(c)(3)(C) of the Internal Revenue Code of 1986, as amended,
shall not constitute a taxable event under this article.
(3) Any amount distributed from a qualified tuition program
that is not described under paragraph (2) shall be taxable under
this article.
A02004 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(4) For purposes of this subsection:
(i) The term "qualified 529 advisor sold plan" shall mean a
channel through which the State or a broker dealer, investment
advisor or other financial intermediary offers a college savings
program under section 529 of the Internal Revenue Code of 1986,
as amended, to eligible investors and assists with the opening
and servicing of individual college savings program accounts.
(ii) The term "designated beneficiary" shall have the same
meaning as provided in section 529(e)(1) of the Internal Revenue
Code of 1986, as amended.
[(ii)] (iii) The term "qualified tuition program" shall have
the same meaning as provided in section 529(b)(1) of the
Internal Revenue Code of 1986, as amended.
* * *
Section 2. The amendment of section 303(a.7) of the act
shall not apply to contributions or rollovers made prior to the
effective date of this section.
Section 3. This act shall take effect as follows:
(1) Section 2 of this act shall take effect January 1,
2018, or immediately, whichever is later.
(2) The remainder of this act shall take effect
immediately.
A02004 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22