The current tax-free status of withdrawals from college savings plans would be made permanent under bipartisan legislation introduced earlier this month in the House.
Currently, the tax-free status of withdrawals expires in 2010. Under the legislation introduced by Reps. Earl Pomeroy, D-N.D., and Melissa Hart, R-Pa., that status would be made permanent under the Tax Code.
Section 529 of the Tax Code covers prepaid tuition plans and savings plans. The legislation proposed by the two congressmen, the College 529 InvEST (Investment in Education Savings for Tomorrow) Act would make the current tax-free and user-friendly administrative rules permanent.