II 109th CONGRESS 1st Session S. 1677 IN THE SENATE OF THE UNITED STATES September 12, 2005 Mr. Schumer introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to permanently extend the deduction for college tuition expenses and to expand such deduction to include expenses for books.

1.

Permanent extension of tuition deduction and expansion to include college book expenses

(a)

In general

Section 222(b)(2) of the Internal Revenue Code of 1986 (relating to applicable dollar limit) is amended by striking subparagraphs (A) and (B) and inserting the following new subparagraphs: (A)

In general

The applicable dollar amount with respect to qualified tuition and related expenses described in subsection (d)(1)(A)(i) shall be equal to— (i)in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $65,000 ($130,000 in the case of a joint return), $4,000, (ii)in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $80,000 ($160,000 in the case of a joint return), $2,000, and (iii)in the case of any other taxpayer, zero. (B)

Books

The applicable dollar amount with respect to qualified tuition and related expenses described in subsection (d)(1)(A)(ii) shall be equal to— (i)in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $65,000 ($130,000 in the case of a joint return), $1,000, (ii)in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $80,000 ($160,000 in the case of a joint return), $500, and (iii)in the case of any other taxpayer, zero. . (b)

Expansion of related expenses

Paragraph (1) of section 222(d) of the Internal Revenue Code of 1986 (relating to definitions and special rules) is amended to read as follows: (1)

Qualified tuition and related expenses

(A)

In general

The term qualified tuition and related expenses— (i)has the meaning given such term by section 25(f), and (ii)includes books (within the meaning of section 529(e)(3)(A)(i)). (B)

Special rule

Such expenses shall be reduced in the same manner as under section 25A(g)(2). . (c)

Deduction made permanent

Section 222 of the Internal Revenue Code of 1986 is amended by striking subsection (e). (d)

Effective date

The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2005.