Congress enacted legislation in 2001 to provide for federal tax-free earnings when money is withdrawn from a 529 account to cover qualified education expenses.  Before the legislation was passed, the earnings portion of a withdrawal was taxed at the student's tax bracket.  The 2001 legislation changed the federal tax treatment on 529 account earnings from low-tax to no-tax.  This tax-free benefit was included in legislation titled, Economic Growth and Tax Relief Reconciliation Act of 2001 [EGTRRA].  All tax legislation enacted in the EGTRRA bill, by law, was scheduled to “sunset” 10 years after passage, and the federal tax treatment would revert back to the provisions that were in place prior to passage of the 2001 legislation.  The Pension Protection Act of 2006 passed by Congress and signed by President Bush in August 2006 finally removed the uncertainty.  The favorable federal tax exemption on earnings in 529 plans when used to pay for qualified college expenses is now permanent.