amended by inserting , except that 10 percent shall be substituted for 20 percent in subparagraph (A) thereof before the period at the end of the first sentence. (B) Modification of tax treatment of deductible contributions Paragraph (1) of section 530(d) is amended to read as follows: (1) Inclusion in gross income (A) In general Any distribution shall be includible in the gross income of the distributee as follows: (i) So much of the distribution as is equal to or less than the deductible amount shall be fully included in gross income. (ii) So much of the distribution which exceeds the deductible amount shall be included in gross income in the manner as provided in section 72 (determined by applying such section without regard to any amounts to which clause (i) applies). (B) Deductible amount For purposes of this paragraph, the term deductible amount means the excess of— (i) the sum of contributions to the account for which a deduction was allowed under section 224 in such year and any preceding taxable year, over (ii) the amount of distributions to which subparagraph (A)(i) applied to in any preceding taxable year. . (3) Clerical amendment The table of sections for part VIII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as relating to section 225 and by inserting after the item relating to section 223 the following new item: Sec. 224. Coverdell lifelong learning account contributions. . (f) Effective date (1) In general Except as otherwise provided in this subsection, the amendments made by this section shall take effect on January 1, 2018. (2) Eligible expenses The amendments made by subsection (b) shall apply to distributions made after December 31, 2018. (3) Contributions The amendments made by paragraphs (1)(B) and (2) of subsection (c) shall apply to contributions made after December 31, 2018. (4) Employer contribution credit and beneficiary deductions The amendments made by subsections (d) and (e) shall apply to taxable years beginning after