119 S1610 IS: Tax-Free Pell Grant Act U.S. Senate 2025-05-06 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

II119th CONGRESS1st SessionS. 1610IN THE SENATE OF THE UNITED STATESMay 6, 2025Mr. Whitehouse (for himself, Mr. Grassley, Mr. Tillis, and Mr. Wyden) introduced the following bill; which was read twice and referred to the Committee on FinanceA BILLTo amend the Internal Revenue Code of 1986 to expand the exclusion of Pell Grants from gross income.

1.

Short title

This Act may be cited as the Tax-Free Pell Grant Act.

2.

Expansion of Pell Grant exclusion from gross income

(a)

In general

Section 117(b)(1) of the Internal Revenue Code of 1986 is amended by striking received by an individual and all that follows and insertingreceived by an individual—(A)as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses, or(B)as a Federal Pell Grant under section 401 of the Higher Education Act of 1965 (as in effect on the date of the enactment of the Tax-Free Pell Grant Act)..(b)

No adjustment under American Opportunity and Lifetime Learning Credits

Section 25A(g)(2)(A) of such Code is amended by inserting (other than a Federal Pell Grant under section 401 of the Higher Education Act of 1965 (as in effect on the date of the enactment of the Tax-Free Pell Grant Act)) after section 117.(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2025.