PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 817 annuities) is amended by striking "and" at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ", and", and by adding at the end the following new subparagraph: "(D) Section 530(h) (relating to education individual retirement accounts).". (d) TAX ON EXCESS CONTRIBUTIONS.— (1) IN GENERAL.— Subsection (a) of section 4973 is amended by striking "or" at the end of paragraph (2), by adding "or" at the end of paragraph (3), and by inserting after paragraph (3) the following new paragraph: "(4) an education individual retirement account (as defined in section 530),". (2) EXCESS CONTRIBUTIONS DEFINED.—Section 4973 is amended by adding at the end the following new subsection: "(e) EXCESS CONTRIBUTIONS TO EDUCATION INDIVIDUAL RETIRE- MENT ACCOUNTS.—For purposes of this section— "(1) IN GENERAL.— In the case of education individual retirement accounts maintained for the benefit of any 1 beneficiary, the term 'excess contributions' means— "(A) the amount by which the amount contributed for the taxable year to such accounts exceeds $500, and "(B) any amount contributed to such accounts for any taxable year if any amount is contributed during such year to a qualified State tuition program for the benefit of such beneficiary. "(2) SPECIAL RULES.— For purposes of paragraph (1), the following contributions shall not be taken into account: "(A) Any contribution which is distributed out of the education individual retirement account in a distribution to which section 530(d)(4)(C) applies. "(B) Any contribution described in section 530(b)(2)(B) to a qualified State tuition program. "(C) Any rollover contribution. ". (e) TECHNICAL AMENDMENTS.— (1) Section 26(b)(2) is amended by redesignating subparagraphs (E) through (P) as subparagraphs (F) through (Q), respectively, and by inserting after subparagraph (D) the following new subparagraph: "(E) section 530(d)(3) (relating to additional tax on certain distributions from education individual retirement accounts),". (2) Subparagraph (C) of section 135(c)(2), as added by the preceding section, is amended by inserting ", or to an education individual retirement account (as defined in section 530) on behalf of an account beneficiary," after "(as defined in such section)". (3) The table of sections for part VIII of subchapter F of chapter 1 is amended by adding at the end the following new item: "Sec. 530. Education individual retirement accounts.". (f) EFFECTIVE DATE.— The amendments made by this section 26 USC 26note. shall apply to taxable years beginning after December 31, 1997.
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