The Senate Finance Committee voted Tuesday to raise to $2,000 the amount parents may deposit in education savings accounts each year and still get a tax break.
If the bill becomes law, it would quadruple the current $500 maximum. Earnings on contributions exceeding the limit are taxable. A 1997 law created these savings vehicles, which are similar to individual retirement accounts.
The bill, which was approved 11 to 8, also would broaden the types of expenses that these accounts may cover beyond higher education to include elementary and secondary school costs.
Finance Committee Chairman William V. Roth, R-Del., said he introduced the legislation to restore provisions that were passed by the Senate last year but stripped from the final bill.