1.This Act may be cited as the
Helping Families Afford Tuition
Act
.
2.Higher education
tuition credit
(a)Section 25A of the Internal Revenue Code of 1986
(relating to Hope and Lifetime Learning credits) is amended to read as
follows:
25A.Higher
education tuition credit
(a)In the case of any eligible student for whom an election
is in effect under this section for any taxable year, there shall be allowed as
a credit against the tax imposed by this chapter for the taxable year in an
amount equal to 50 percent of so much of the qualified tuition and related
expenses paid by the taxpayer during the taxable year (for education furnished
to the eligible student during any academic period beginning in such taxable
year) as does not exceed $10,000.
(b)
(1)Limitation based
on modified adjusted gross income
(A)The amount which would (but for this paragraph) be taken
into account under subsection (a) for the taxable year shall be reduced (but
not below zero) by the amount determined under subparagraph (B).
(B)The amount determined under this subparagraph is the
amount which bears the same ratio to the amount which would be so taken into
account as—
(i)the excess
of—
(I)the taxpayer’s
modified adjusted gross income for such taxable year, over
(II)$100,000
($200,000 in the case of a joint return), bears to
(ii)$10,000 ($20,000
in the case of a joint return).
(C)Modified
adjusted gross incomeThe term modified adjusted gross
income means the adjusted gross income of the taxpayer for the taxable
year increased by any amount excluded from gross income under section 911, 931,
or 933.
(2)
(A)Credit allowed
only for 5 taxable yearsAn
election to have this section apply with respect to any eligible student may
not be made for any taxable year if such an election (by the taxpayer or any
other individual) is in effect with respect to such student for any 5 prior
taxable years.
(B)Credit allowed
for year only if individual is at least 1/2 time student for portion of
yearThe credit under subsection (a) shall not be allowed for a
taxable year with respect to the qualified tuition and related expenses of an
individual unless such individual is an eligible student for at least one
academic period which begins during such year.
(C)Credit allowed
only for first 5 years of post secondary educationAn election to
have this section apply with respect to any eligible student may not be made
for any taxable year if the student has completed (before the beginning of such
taxable year) 5 years of post secondary education at one or more eligible
educational institutions.
(D)Denial of credit
if student convicted of a felony drug offenseThe credit under
subsection (a) shall not be allowed for qualified tuition and related expenses
for the enrollment or attendance of a student for any academic period if such
student has been convicted of a Federal or State felony offense consisting of
the possession or distribution of a controlled substance before the end of the
taxable year with or within which such period ends.
(c)For
purposes of this subsection—
(1)The term eligible student means, with
respect to any academic period, a student who—
(A)meets the
requirements of section 484(a)(1) of the Higher Education Act of 1965 (20
U.S.C. 1091(a)(1)), as in effect on the date of the enactment of the Taxpayer
Relief Act of 1997, and
(B)is carrying at
least 1/2 the normal full-time work load for the course of
study the student is pursuing.
(2)Qualified tuition
and related expenses
(A)The term qualified tuition and related
expenses means tuition and fees required for the enrollment or
attendance of an eligible student who is—
(i)the
taxpayer,
(ii)the taxpayer's
spouse, or
(iii)any dependent of
the taxpayer with respect to whom the taxpayer is allowed a deduction under
section 151,
at an
eligible educational institution for courses of instruction of such individual
at such institution.(B)Exception for
education involving sports, etcSuch term does not include
expenses with respect to any course or other education involving sports, games,
or hobbies, unless such course or other education is part of the individual’s
degree program.
(C)Exception for
nonacademic feesSuch term does not include student activity
fees, athletic fees, insurance expenses, or other expenses unrelated to an
individual's academic course of instruction.
(3)Eligible
educational institutionThe term eligible educational
institution means an institution—
(A)which is described
in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in
effect on the date of the enactment of the Taxpayer Relief Act of 1997,
and
(B)which is eligible
to participate in a program under title IV of the Higher Education Act of
1965.
(d)
(1)Identification
requirementNo credit shall be allowed under subsection (a) to a
taxpayer with respect to the qualified tuition and related expenses of an
individual unless the taxpayer includes the name and taxpayer identification
number of such individual on the return of tax for the taxable year.
(2)Adjustment for
certain scholarships, etcThe amount of qualified tuition and
related expenses otherwise taken into account under subsection (a) with respect
to an individual for an academic period shall be reduced (before the
application of subsections (a), (b), and (c)) by the sum of any amounts paid
for the benefit of such individual which are allocable to such period
as—
(A)a qualified
scholarship which is excludable from gross income under section 117,
(B)an educational
assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United
States Code, or under chapter 1606 of title 10, United States Code, and
(C)a payment (other
than a gift, bequest, devise, or inheritance within the meaning of section
102(a)) for such individual's educational expenses, or attributable to such
individual's enrollment at an eligible educational institution, which is
excludable from gross income under any law of the United States.
(3)Treatment of
expenses paid by dependentIf a deduction under section 151 with
respect to an individual is allowed to another taxpayer for a taxable year
beginning in the calendar year in which such individual's taxable year
begins—
(A)no credit shall be
allowed under subsection (a) to such individual for such individual's taxable
year, and
(B)qualified tuition
and related expenses paid by such individual during such individual's taxable
year shall be treated for purposes of this section as paid by such other
taxpayer.
(4)Treatment of
certain prepaymentsIf qualified tuition and related expenses are
paid by the taxpayer during a taxable year for an academic period which begins
during the first 3 months following such taxable year, such academic period
shall be treated for purposes of this section as beginning during such taxable
year.
(5)No credit shall be allowed under this section for any
expense for which a deduction is allowed under any other provision of this
chapter.
(6)No credit for
married individuals filing separate returnsIf the taxpayer is a
married individual (within the meaning of section 7703), this section shall
apply only if the taxpayer and the taxpayer's spouse file a joint return for
the taxable year.
(7)If the taxpayer is a nonresident alien individual for any
portion of the taxable year, this section shall apply only if such individual
is treated as a resident alien of the United States for purposes of this
chapter by reason of an election under subsection (g) or (h) of section
6013.
(e)The
Secretary may prescribe such regulations as may be necessary or appropriate to
carry out this section, including regulations providing for a recapture of the
credit allowed under this section in cases where there is a refund in a
subsequent taxable year of any amount which was taken into account in
determining the amount of such
credit.
.
(b)Repeal of
deduction for qualified tuition and related expenses
(1)Part VII of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 is amended by striking section 222 (relating to qualified
tuition and related expenses).
(2)The table of section for part VII of subchapter B of
chapter 1 of such Code is amended by striking the item relating to section
222.
(c)
(1)Section 62(a) of
such Code is amended by striking paragraph (18).
(2)Subparagraph (B)
of section 72(t)(7) of such Code is amended by striking section
25A(g)(2)
and inserting section 25A(d)(2)
.
(3)Section 221(d) of
such Code is amended—
(A)by striking
section 25A(g)(2)
in paragraph (2)(B) and inserting
section 25A(d)(2)
,
(B)by striking
section 25A(f)(2)
in paragraph (2)(B) and inserting
section 25A(c)(3)
, and
(C)by striking
section 25A(b)(3)
in paragraph (3) and inserting section
25A(c)(1)
.
(4)Section 529 of
such Code is amended—
(A)by striking
section 25A(g)(2)
in subclause (I) of subsection (c)(3)(B)(v)
and inserting section 25A(d)(2)
, and
(B)by striking
section 25A(b)(3)
in clause (i) of subsection (e)(3)(B) and
inserting section 25A(c)(1)
.
(5)Section 530 of
such Code is amended—
(A)by striking
section 25A(g)(2)
in subclause (I) of subsection (d)(2)(C)(i)
and inserting section 25A(d)(2)
, and
(B)by striking
section 25A(g)(2)
in clause (iii) of subsection (d)(4)(B) and
inserting section 25A(d)(2)
.
(6)Section 1400O of
such Code is amended by adding at the end the following flush sentence:
For
purposes of this section, any reference to section 25A shall be treated as a
reference to such section before the date of the enactment of this
sentence..
(7)Subsection (e) of
section 6050S of such Code is amended by striking (without regard to
subsection (g)(2) thereof)
and inserting (without regard to
subsection (d)(2) thereof)
.
(8)Subparagraph (J) of
section 6213(g)(2) of such Code is amended by striking section
25A(g)(1)
and inserting section 25A(d)(1)
.
(9)The table of
sections for subpart A of part IV of subchapter A of chapter 1 of such Code is
amended by striking the item relating to section 25A and inserting the
following:
Sec. 25A. Higher education tuition
credit.
.
(d)The amendments made by this section shall apply to taxable
years beginning after December 31, 2010.