TAX CREDIT FOR CHARITABLE DONATIONS: A bill that would provide tax credits for charitable contributions has been stalled in the House since its introduction earlier this year. HR 4702 would let taxpayers take a credit of up to $1,000 for charitable contributions or opt for an itemized deduction. The bill has remained idle in the Ways and Means Committee.

ANNUITY TAX RELIEF: Tax relief for annuity investors appears stalled for now. Congressional committees have yet to consider bills that would provide a 50% tax exclusion on the annual income from a NQ lifetime annuity. The Senate bill (S 1297) would allow an exclusion of up to $20,000 whereas the House bill (HR 2748) would provide the tax break up to $10,000 annually.

EXPANSION OF §529 PLANS: The House Ways and Means Committee has yet to address a bill that would expand allowable uses for §529 college savings plan distributions. HR 5030 (“College Savings Flexibility Act of 2010”) would allow such distributions to be used temporarily to repay student loans. The provision would apply to interest or principal paid from 1/1/10 through and including 12/31/14.

LIFETIME SAVINGS ACCOUNTS: Legislation in the Senate (S 3577) and House (HR 4682) would create “Lifetime Savings Accounts” for every newborn child in America. The companion bills would open LSAs with $500/child at birth. Children in families below the national median income would be eligible for up to an additional $500 at birth and matching funds up to $500/yr for additional funds put into the account. Accountholders could withdraw funds at age 18 for higher education purposes and/or at age 25 for homeownership or a retirement plan.

PERSONAL FINANCE IN CLASSROOMS: HR 5165 (“Financial Education in the Classroom Act”) aims to promote financial literacy among the nation’s students by creating a federal grant program. States would then deliver funds to school districts that partner with the community in an effort to teach personal financial management skills to students.

RETIREMENT PLAN EXEMPTION FOR SMALL-BUSINESSES: HR 5318 (“Small Business Investment Penalty Relief Act of 2010) would waive the 10% penalty on early distributions from retirement plans if the funds were used for small-business investments. The bill joins several pending bills (such as HR 3612 and HR 3390) that seek similar waivers for early IRA distributions in certain situations.