A bill to amend the Internal Revenue Code of 1986 to provide that amounts in individual retirement plans not be counted in determining eligibility for aid to families with dependent children, to allow withdrawls from such plans to pay for higher education expenses, and for other purposes.

Amends the Social Security Act to disregard amounts in the individual retirement plan of an individual receiving Aid to Families with Dependent Children payments as a resource or income for purposes of eligibility for such payments.

Amends the Internal Revenue Code to allow penalty-free distributions from an individual retirement plan, or from amounts attributable to employer contributions made pursuant to elective deferrals, to the extent such distributions do not exceed qualified higher education expenses of the taxpayer, the taxpayer's spouse, or the taxpayer's child or grandchild.