text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Savings Enhancement for Education in 
  College Act''.
  
  SEC. 2. CREDIT FOR CONTRIBUTIONS TO 529 PLANS.
  
      (a) In General.--Subsection (d) of section 25B of the Internal 
  Revenue Code of 1986 (relating to elective deferrals and IRA 
  contributions by certain individuals) is amended by redesignating 
  paragraph (2) as paragraph (3) and by inserting after paragraph (1) the 
  following new paragraph:
              ``(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.''.
      (b) Conforming Amendments.--
              (1) Section 25B of such Code is amended by striking 
          ``qualified retirement savings'' each place it appears in the 
          text and inserting ``qualified savings''.
              (2) The subsection heading for section 25B(d) of such Code 
          is amended by striking ``Retirement''.
              (3) Subparagraph (A) of section 25B(d)(3) of such Code, as 
          redesignated by subsection (a), is amended--
                      (A) by striking ``paragraph (1)'' the first place 
                  it appears and inserting ``paragraph (1) or (2)'', and
                      (B) by striking ``paragraph (1)'' the second place 
                  it appears and inserting ``paragraph (1), or (2), as 
                  the case may be,''.
              (4) The heading for section 25B of such Code is amended by 
          striking ``and ira contributions'' and inserting ``, ira 
          contributions, and qualified tuition program contributions''.
              (5) The table of sections for subpart A of part IV of 
          subchapter A of chapter 1 of such Code is amended by striking 
          the item relating to section 25B and inserting the following 
          new item:
  
  ``Sec. 25B. Elective deferrals, IRA contributions, and qualified 
                              tuition program contributions by certain 
                              individuals.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to contributions made after December 31, 2012, in taxable years 
  ending after such date.
  
  SEC. 3. EXCLUSION FROM GROSS INCOME FOR EMPLOYER CONTRIBUTIONS TO 
                QUALIFIED TUITION PROGRAMS.
  
      (a) In General.--Part III of subchapter B of chapter 1 of the 
  Internal Revenue Code of 1986 (relating to items specifically excluded 
  from gross income) is amended by inserting after section 127 the 
  following new section:
  
  ``SEC. 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.
          Any increase determined under the preceding sentence shall be 
          rounded to the nearest multiple of $50.
      ``(f) Cross Reference.--For reporting and recordkeeping 
  requirements, see section 6039D.''.
      (b) Exclusion From Employment Taxes.--
              (1) Sections 3121(a)(18), 3306(b)(13), and 3401(a)(18) of 
          such Code are each amended by inserting ``127A,'' after 
          ``127,'' each place it appears.
              (2) Section 3231(e)(6) of such Code is amended by striking 
          ``section 127'' and inserting ``section 127 or 127A''.
      (c) Reporting and Recordkeeping Requirements.--Section 6039D(d)(1) 
  of such Code is amended by inserting ``127A,'' after ``127,''.
      (d) Other Conforming Amendments.--
              (1) Sections 125(f), 414(n)(3)(C), and 414(t)(2) of such 
          Code are each amended by inserting ``127A,'' after ``127,'' 
          each place it appears.
              (2) Section 132(j)(8) of such Code is amended by striking 
          ``section 127'' and inserting ``section 127 or 127A''.
              (3) Section 1397(a)(2)(A) of such Code is amended by 
          inserting at the end the following new clause:
                              ``(iii) Any amount paid or incurred by an 
                          employer which is excludable from the gross 
                          income of an employee under section 127A, but 
                          only to the extent paid or incurred to a person 
                          not related to the employer.''.
              (4) Section 209(a)(15) of the Social Security Act (42 
          U.S.C. 409(a)(15)) is amended by striking ``or 129'' and 
          inserting ``, 127A, or 129''.
      (e) Clerical Amendment.--The table of sections for part III of 
  subchapter B of chapter 1 of such Code is amended by inserting after 
  the item relating to section 127 the following new item:
  
  ``Sec. 127A. Employer contributions to qualified tuition programs.''.
      (f) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after the date of the enactment of 
  this Act.
target: Savings Enhancement for Education in College Act - Amends the Internal Revenue Code to: (1) allow a tax credit for contributions to qualified tuition plans; and (2) allow an exclusion, up to $600, from the gross income of an employee for employer contributions to a qualified tuition program.
feat_title: Savings Enhancement for Education in College Act