I 115th CONGRESS 2d Session H. R. 7021 IN THE HOUSE OF REPRESENTATIVES October 2, 2018 Mr. Paulsen (for himself and Mr. Coffman ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide for distributions from 529 plans to pay certain early education expenses.

1. Distributions from 529 plans for certain early education expenses (a) In general Section 529(e)(3) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) Special rules permitting limited treatment of qualified early education expenses (i) In general Except as provided in clause (ii), qualified early education expenses shall be treated as qualified higher education expenses. (ii) Limitation If the aggregate amount of cash distributions from all qualified tuition programs described in subsection (b)(1)(A)(ii) with respect to a beneficiary for qualified early education expenses during any taxable year exceeds $10,000, such excess shall be treated for purposes of subsection (c)(3) as distributions in excess of the qualified higher education expenses of the beneficiary. (iii) Qualified early education expenses For purposes of this subparagraph, the term qualified early education expenses means expenses for providing educational and other care to a child under age 5 (including childcare provided before and after school), as determined under the law of the State, pursuant to attendance at a school or facility licensed in the State for such purpose. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2018.