[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 386 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 386
To amend the Internal Revenue Code of 1986 to simplify and improve the
current education tax incentives.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 9, 2009
Mr. Doggett 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 simplify and improve the
current education tax incentives.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``College Learning Access Simplicity
and Savings Act of 2009'' or the ``CLASS Act of 2009''.
SEC. 2. CREATION OF COLLEGE AFFORDABILITY CREDIT AND SIMPLIFICATION OF
EDUCATION TAX BENEFITS.
(a) College Affordability Credit.--
(1) Paragraph (1) of section 25A(a) of the Internal Revenue
Code of 1986 is amended by striking ``the Hope Scholarship
Credit'' and inserting ``the College Affordability Credit''.
(2) Subsection (b) of section 25A of such Code is amended
to read as follows:
``(b) College Affordability Credit.--
``(1) Allowance of credit.--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 an
amount equal to the sum of--
``(A) 100 percent of so much of the qualified
tuition and related expenses paid by the taxpayer
during the taxable year (with respect to attendance of
the eligible student at an eligible educational
institution during any academic period beginning in
such taxable year) as does not exceed $1,200, and
``(B) 50 percent of so much of such expenses as
exceeds $1,200, but does not exceed $4,800.
``(2) Lifetime credit limitation.--The amount of the credit
allowed under paragraph (1) for any taxable year with respect
to any eligible student shall not exceed the excess of--
``(A) $12,000, over
``(B) the aggregate credit allowed under subsection
(a) with respect to such eligible student for all prior
taxable years.
``(3) Credit allowed only for first 2 years of graduate
education.--No credit shall be allowed under subsection (a)(1)
for a taxable year with respect to the qualified tuition and
related expenses of an eligible student if the student has
completed (before the beginning of such taxable year) 2 years
of graduate education at one or more eligible educational
institutions.
``(4) Credit allowed for year only if individual is at
least \1/2\ time student for portion of year.--The College
Affordability Credit under subsection (a)(1) 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.
``(5) Eligible student.--The term `eligible student' means,
with respect to any academic period, any individual 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.''.
(b) Qualified Tuition and Related Expenses To Include Required
Course Materials.--Subparagraph (A) of section 25A(f)(1) of such Code
is amended by striking ``tuition and fees'' and inserting ``tuition,
fees, and course materials''.
(c) Increased Income Limitation.--Subsection (d) of section 25A of
such Code is amended to read as follows:
``(d) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--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 paragraph (2).
``(2) Amount of reduction.--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--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) the applicable amount under
paragraph (4), bears to
``(B) $25,000 ($50,000 in the case of a joint
return).
``(3) Modified adjusted gross income.--The 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.
``(4) Applicable amount.--The applicable amount under this
subparagraph is--
``(A) in the case of a joint return, 200 percent of
the dollar amount in effect under subparagraph (B) for
the taxable year, and
``(B) in any other case, $50,000.''.
(d) Modified Inflation Adjustment.--Paragraph (2) of section 25A(h)
of such Code is amended to read as follows:
``(2) Income limits.--
``(A) In general.--In the case of a taxable year
beginning after 2009, the $50,000 amount in subsection
(d)(4)(B) shall each be increased by an amount equal
to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2008'
for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $1,000, such
amount shall be rounded to the next lowest multiple of
$1,000.''.
(e) Portion of Credit Refundable.--Section 25A of such Code is
amended by redesignating subsection (i) as subsection (j) and by
inserting after subsection (h) the following new subsection:
``(i) Portion of Credit Refundable.--
``(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by an amount equal
to 50 percent of the portion of the amount of the credit which
would have been allowed to the taxpayer under this section by
reason of subsection (b) (without regard to this subsection and
the limitation under section 26(a)(2)). The amount of the
credit allowed under this subsection shall not be treated as a
credit allowed under this subpart and shall reduce the amount
of credit otherwise allowable under subsection (a) (without
regard to section 26(a)(2)).
``(2) Reduction of credit.--In the case of a taxable year
to which 26(a)(2) does not apply, the credit determined under
paragraph (1) for the taxable year shall be reduced by the
amount of tax imposed by section 55 (relating to alternative
minimum tax) with respect to such taxpayer for such taxable
year.''.
(f) Repeal of Deduction for Qualified Tuition and Related
Expenses.--
(1) In general.--Part VII of subchapter B of chapter 1 of
such Code (relating to additional itemized deductions for
individuals) is amended by striking section 222.
(2) Clerical amendment.--The table of sections for part VII
of subchapter B of chapter 1 of such Code is amended by
striking the item relating to section 222.
(g) Conforming Amendments.--
(1) The heading for Section 25A of such Code is amended by
striking ``hope'' and inserting ``college affordability''.
(2) Section 25A(c)(2)(A) of such Code is amended--
(A) by striking ``Hope Scholarship Credit'' and
inserting ``College Affordability Credit'', and
(B) by striking ``Hope'' in the heading thereof and
inserting ``College affordability''.
(3) Section 62(a) of such Code is amended by striking
paragraph (18).
(4) Subparagraph (A) of section 86(b)(2) of such Code is
amended by striking ``, 222''.
(5) Subparagraph (A) of section 135(c)(4) of such Code is
amended by striking ``, 222''.
(6) Subparagraph (A) of section 137(b)(3) of such Code is
amended by striking ``, 222''.
(7) Subparagraph (A) of section 199(d)(2) of such Code is
amended by striking ``, 222''.
(8) Clause (ii) of section 219(g)(3)(A) of such Code is
amended by striking ``, 222''.
(9) Clause (i) of section 221(b)(2)(C) of such Code is
amended by striking ``, 222''.
(10) Clause (iii) of section 469(i)(3)(F) of such Code is
amended by striking ``221, and 222'' and inserting ``and 221''.
(11) Paragraph (3) of section 221(d) of such Code is
amended by striking ``25A(b)(3)'' and inserting ``25A(b)(5)''.
(12) Clause (i) of section 529(e)(3)(B) of such Code is
amended by striking ``section 25A(b)(3)'' and inserting
``section 221(d)(3)''.
(13) The heading for clause (v) of section 529(c)(3)(B) of
such Code is amended by striking ``Hope'' and inserting
``College affordability''.
(14) The heading for Subparagraph (C) of section 530(d)(2)
of such Code is amended by striking ``Hope'' and inserting
``College affordability''.
(15) 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 as in effect on the day before
the date of the enactment of this sentence.''.
(16) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``, 25A,'' after ``section
35''.
(h) Clerical Amendment.--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
new item:
``Sec. 25A. College Affordability and Lifetime Learning credits.''.
(i) Effective Date.--The amendments made by this section shall
apply to expenses paid after December 31, 2008, for education furnished
in academic periods beginning after such date.
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