1.
(a)Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139 the following new section:
139A.Certain wages of certified master teachers
(a)Gross income does not include 25 percent of wages earned by a certified master teacher in remuneration for employment at a qualified school in need of improvement.
(b)For purposes of this section—
(1)The term certified master teacher means any eligible teacher who is certified by a State as being eligible for the exclusion from gross income provided under subsection (a) with respect to wages earned during a 4-year certification period. A teacher shall not be treated as a certified master teacher except during the certification period.
(2)Recertification prohibitedA teacher shall not be certified as a certified master teacher for more than one certification period.
(3)State limitation on number of certified master teachersA State may not certify any teacher if such certification would result (at the time of such certification) in more than 10 percent of the State’s public school teachers being certified master teachers.
(c)Qualified school in need of improvementFor purposes of this section, the term qualified school in need of improvement means, with respect to any certified master teacher—
(1)the school in need of improvement which first employs such teacher during the certification period,
(2)any school in need of improvement which subsequently employs such teacher, but only if each school in need of improvement which previously employed such teacher during the certification period has ceased to be a school in need of improvement, and
(3)any school described in paragraph (1) or (2) which ceases to be a school in need of improvement, but only if such teacher was employed by such school (during such teacher’s certification period) at the time that such school ceased to be a school in need of improvement.
(d)School in need of improvementFor purposes of this section, the term school in need of improvement means a public elementary or secondary school that—
(1)is identified for school improvement, corrective action, or restructuring under section 1116 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6316), and
(2)is eligible for a schoolwide program under section 1114 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314).
(e)For purposes of this section, the term eligible teacher means a teacher who—
(1)has had at least 5 years of teaching experience in a public elementary or secondary school,
(2)is highly qualified, as defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801),
(3)has a master’s degree, and
(4)has advanced certification in the teacher’s State licensing system.
(f)For purposes of this section, the term certification period means, with respect to any certified master teacher, the 4-year period described in subsection (b).
(g)State identification required on returnWith respect to any certified master teacher, no exclusion shall be allowed under subsection (a) for any taxable year unless the certified master teacher includes the State in which the teacher has been certified on the certified master teacher’s return of tax for such taxable year.
(h)This section shall not apply to any taxable year beginning after December 31, 2013. .
(b)The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139 the following new item:
Sec. 139A. Certain wages of certified master teachers.
(c)The Secretary of the Treasury shall transmit to the Congress for each of calendar years 2005 through 2013 an annual report stating, with respect to each State, the number of individuals certified by such State as certified master teachers who were allowed an exclusion from gross income under section 139A of the Internal Revenue Code of 1986 for a taxable year ending in such calendar year.
(d)The amendments made by this section shall apply to taxable years beginning after December 31, 2004.