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(iii) qualified educational or skill development expenses (as defined in paragraph (5)).
(5) Qualified educational or skill development expenses
The term qualified educational or skill development expenses means—(A) expenses paid or incurred—(i) after the beneficiary attains age 16, and(ii) for participation or enrollment of the beneficiary in services or activities that are—(I) training services described in section 134(c)(3)(D) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3174(c)(3)(D)) that are offered by a provider included on the list of eligible providers of training services described in section 122 of such Act (29 U.S.C. 3152),(II) career and technical education activities defined in section 3 of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2302) that are offered through an eligible institution (as defined in such section),(III) career services described in clauses (iii), (iv), and (xi) of section 134(c)(2)(A) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3174(c)(2)(A)) that are provided by providers eligible under section 134(c)(2)(C) of such Act,(IV) youth workforce investment activities described in section 129(c)(2) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3164(c)(2)) that are provided by eligible providers of youth workforce investment activities under section 123 of such Act, or(V) adult education and literacy activities, as defined in section 203 of the Adult Education and Family Literacy Act (29 U.S.C. 3272), that are provided by eligible providers of adult education and literacy activities under section 231 of such Act (29 U.S.C. 3321),(B) expenses for transportation required for or provided by any of the services or activities described in subparagraph (A),(C) expenses for testing necessary for enrollment in, or certification in connection with, services or activities described in subparagraph (A), or(D) expenses for the purchase of any computer software (as defined by section 197(e)(3)(B)), computer or peripheral equipment (as defined by section 168(i)(2)(B)), fiber optic cable related to computer use, internet access and related services, if such software, equipment, or services are to be used by the beneficiary for services or activities described in subparagraph (A) during any of the years the beneficiary is participating in or enrolled in any of the services or activities described in subparagraph (A).
(iv) in the case of a beneficiary who is over the age of 30, if such contribution would result in the balance of the account exceeding $10,000.
shall not be treated as a distribution for purposes of paragraph (1) if—(A) the old beneficiary has not attained age 30 before the date of the change in beneficiary, and(B) the new beneficiary
45BB. Employee educational skills and development expenses
(a) General rule
For purposes of section 38, the employee educational skills and development contribution credit determined under this section for any taxable year is 25 percent of the nonelective contributions made by the taxpayer during the taxable year to a Coverdell lifelong learning account (as defined in section 530(b)) the designated beneficiary of which is an employee of the taxpayer.(b) Special rules and definitions
For purposes of this section—(1) Employee
(A) Certain employees excluded
The term employee shall not include—(i) an employee within the meaning of section 401(c)(1),(ii) any 2-percent shareholder (as defined in section 1372(b)) of an S corporation,(iii) any 5-percent owner (as defined in section 416(i)(1)(B)(i)) of taxpayer, or(iv) any individual who bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)(2) to, or is a dependent described in section 152(d)(2)(H) of, an individual described in clause (i), (ii), or (iii).(B) Leased employees
The term employee shall include a leased employee within the meaning of section 414(n).(2) Nonelective contribution
The term nonelective contribution means an employer contribution other than an employer contribution pursuant to a salary reduction arrangement.(3) Aggregation and other rules made applicable
(A) Aggregation rules
All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of this section.(B) Other rules
Rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.
(42) the employee educational skills and development contribution credit determined under section 45BB(a).
Sec. 45BB. Employee educational skills and development expenses.
226. Coverdell Lifelong learning account contributions
(a) In general
In the case of an individual who—(1) is the designated beneficiary of a Coverdell lifelong learning account (as defined in section 530(b)(1)), and(2) has attained the age of 18 before the close of the taxable year,there shall be allowed as a deduction an amount equal to the contributions for the taxable year by or on behalf of such individual to the account described in paragraph (1).(b) Recontributed amounts
No deduction shall be allowed under this section with respect to a rollover contribution described in section 530(d)(5).
(1) Inclusion in gross income
(A) In general
Any distribution shall be includible in the gross income of the distributee as follows:(i) So much of the distribution as is equal to or less than the deductible amount shall be fully included in gross income.(ii) So much of the distribution which exceeds the deductible amount shall be included in gross income in the manner as provided in section 72 (determined by applying such section without regard to any amounts to which clause (i) applies).(B) Deductible amount
For purposes of this paragraph, the term deductible amount means the excess of—(i) the sum of contributions to the account for which a deduction was allowed under section 226 in such year and any preceding taxable year, over(ii) the amount of distributions to which subparagraph (A)(i) applied to in any preceding taxable year.
Sec. 226. Coverdell lifelong learning account contributions.