Under current law, there is a college tuition and expenses program, commonly
referred to as "EdVest I," under which a contributor may purchase "tuition units"
that can be used to pay qualified educational costs on behalf of a beneficiary. The
purchase of the units is limited to parents, grandparents, aunts, uncles, legal
guardians, trusts created on behalf of a beneficiary, or individuals purchasing units
for their own use. Contributions made to an account set up under the program, up
to a limit of $3,000 each year for each beneficiary, may be deducted from a
contributor's income in the calculation of his or her income taxes if the beneficiary
of the account is one of the following: the claimant; the claimant's child and the
claimant's dependent under the Internal Revenue Code; the claimant's grandchild;
the claimant's great-grandchild; or the claimant's niece or nephew.

Also, under current law, there exists a college savings program, commonly
referred to as "EdVest II," under which anyone may open an account for a prospective

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student, regardless of the contributor's relationship to the beneficiary. Individuals
may open accounts for themselves, and a prospective student may be the beneficiary
of more than one college savings account. Contributions made to an account set up
under the program, up to a limit of $3,000 each year for each beneficiary, may be
deducted from a contributor's income in the calculation of his or her income taxes if
the beneficiary of the account is one of the following: the claimant; the claimant's
child and the claimant's dependent under the Internal Revenue Code; the claimant's
grandchild; the claimant's great-grandchild; or the claimant's niece or nephew.

Under this bill, an income tax deduction for amounts contributed to both
EdVest I and EdVest II may be claimed by a divorced or legally separated parent of
a child. The deduction may be claimed without regard to whether the child is his or
her dependent.

Currently, the total amount for which a deduction may be claimed under the
college tuition and expenses program and the college savings program, per
beneficiary, by any claimant, may not exceed $3,000 each year and, in the case of a
married couple filing a joint return, the total annual deduction under these two
programs, per beneficiary, claimed by the married couple may not exceed $3,000.

Under the bill, the total annual deduction under these two programs, per
beneficiary, claimed by married parents who file jointly or separately, or by each
divorced or legally separated parent of a child, may not exceed $3,000. The total
annual deduction under the bill, under these two programs, per beneficiary, claimed
by a married person who files separately may not exceed $1,500 per claimant.