I 108th CONGRESS 2d Session H. R. 5262 IN THE HOUSE OF REPRESENTATIVES October 7, 2004 Mr. Fossella introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow a deduction from gross income for uncompensated education costs incurred by veterans’ survivors and dependents who are in receipt of educational assistance under chapter 35 of title 38, United States Code.

1.

Findings

The Congress finds that— (1)the United States owes a debt to those men and women who have lost their lives or have become completely and permanently disabled in the line of duty while defending the Nation in the war on terrorism; (2)the United States owes a debt to the families of these fallen heroes for their sacrifices; and (3)one way to begin repaying this debt would be to ensure that the children of these fallen heroes have access to higher education.

2.

Deduction of education costs of veterans’ survivors and dependents

(a)

In general

Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

224.

Education costs of veterans’ survivors and dependents

(a)

Deduction allowed

In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the amount paid by the taxpayer during the taxable year (for education furnished to the eligible person during any academic period beginning in such taxable year) for qualified education expenses. (b)

Eligible person

For purposes of subsection (a), the term eligible person has the meaning given such term by section 3501(a)(1) of title 38, United States Code. (c)

Qualified education expenses

For purposes of subsection (a)— (1)

In general

The term qualified education expenses means expenses for educational assistance to which the eligible person would be entitled for a month under chapter 35 of title 38, United States Code, but for the maximum amount of educational assistance allowance payable for such month under section 3532 of such chapter. (2)

Coordination with other education-related benefits

The amount of qualified education expenses for any taxable year shall be reduced by the sum of— (A)the amount excluded from gross income under section 127, 135, 529, or 530 by reason of such expenses, and (B)the amount of any scholarship, allowance, or payment described in section 25A(g)(2).

. (b)

Deduction allowed whether or not individual itemizes other deductions

Subsection (a) of section 62 of such Code is amended by inserting after paragraph (19) the following new paragraph: (20)

Education costs of veterans’ survivors and dependents

The deduction allowed by section 224.. (c)

Clerical amendment

The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items: Sec. 224. Education costs of veterans’ survivors and dependents Sec. 225. Cross reference. (d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2000, for amounts paid or incurred for education furnished after September 11, 2001.