A bill to amend the Internal Revenue Code of 1954 to allow an individual to establish a tax exempt trust fund for the support of a handicapped dependent.

Amends the Internal Revenue Code to allow individual taxpayers an income tax deduction for cash contributions to a handicapped dependent support fund. Limits the dollar amount of such deduction to $1,500 in calendar year 1980 with inflation adjustments to such amount in succeeding taxable years.

Defines "handicapped dependent support fund" as an irrevocable trust created for the exclusive benefit of a dependent of a taxpayer who is a handicapped individual. Sets forth requirements for the establishment and operation of the trust fund.

Exempts handicapped dependent support trusts from income taxation.