A bill to amend the Internal Revenue Code of 1986 to provide for the establishment of, and the deduction of contributions to, education savings accounts.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to allow an individual taxpayer an income tax deduction for cash contributions to a savings account established to pay the educational expenses (tuition, supplies, meals, and lodging) of a dependent at an institution of higher education or a vocational school. Limits the amount of the deduction to the lesser of $1,000 or the earned income includible in the taxpayer's gross income for the year. Disallows the deduction for contributions to an account maintained for any individual who has attained age 19. Provides that: (1) no account may have more than one beneficiary; and (2) no individual may be a beneficiary of more than one account. Permits the exclusion from gross income of payments and distributions from an education savings account that are used exclusively for the educational expenses of the eligible beneficiary or are distributions of excess contributions before the due date of the tax return. Exempts the accounts themselves from taxation (except for the tax on unrelated business income of a charitable organization) unless they cease to be proper education savings accounts because either the contributor-taxpayer either engages in prohibited t…