[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 518 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 518
To amend the Internal Revenue Code of 1986 to consolidate the current
education tax incentives as one credit against income tax for qualified
tuition and related expenses.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 14, 2009
Mr. Israel (for himself, Mr. Rodriguez, Mr. Ryan of Ohio, Mr. Weiner,
Ms. Bean, and Ms. Shea-Porter) 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 consolidate the current
education tax incentives as one credit against income tax for qualified
tuition and related expenses.
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 ``Middle Class College Tuition Tax
Credit Expansion Act of 2009''.
SEC. 2. QUALIFIED TUITION AND RELATED EXPENSES CREDIT.
(a) In General.--Section 25A of the Internal Revenue Code of 1986
(relating to Hope and Lifetime Learning Credits) is amended to read as
follows:
``SEC. 25A. QUALIFIED TUITION AND RELATED EXPENSES CREDIT.
``(a) Allowance of Credit.--In the case of any eligible individual
for whom an election is in effect under this section, there shall be
allowed as a credit against the tax imposed by this chapter for the
taxable year 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 individual during any
academic period beginning in such taxable year) as does not exceed
$10,000.
``(b) Limitations.--
``(1) Modified adjusted gross income limitation.--
``(A) 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).
``(B) Amount of reduction.--The amount determined
under this paragraph 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) the applicable amount under
paragraph (4), bears to
``(ii) $5,000 ($10,000 in the case of a
joint return).
``(C) 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.
``(D) Applicable amount.--The applicable amount
under this subparagraph is--
``(i) in the case of a joint return, 200
percent of the dollar amount in effect under
subparagraph (B) for the taxable year, and
``(ii) in any other case, $100,000.
``(2) Credit allowed for only 4 taxable years.--An election
to have this section apply with respect to any eligible
individual 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 individual for any 4 prior taxable years.
``(c) Definitions.--For purposes of this section--
``(1) Eligible individual.--The term `eligible individual'
means any individual described in paragraph (2).
``(2) Qualified tuition and related expenses.--
``(A) In general.--The term `qualified tuition and
related expenses' means tuition and fees required for
the enrollment or attendance of --
``(i) 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) Books.--Such term shall include books
required for such individual's academic courses of
instruction at the eligible educational institution.
``(C) Exception for education involving sports,
etc.--Such 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.
``(D) Exception for nonacademic fees.--Such 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 institution.--Ther term
`eligible educational institution' means an institution--
``(A) which is described in section 481 of the
Higher Education Act of 1965, 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) Special Rules.--
``(1) Identification requirement.--No credit shall be
allowed under subsection (a) to a taxpayer with respect to an
eligible student unless the taxpayer includes the name and
taxpayer identification number of such student on the return of
tax for the taxable year.
``(2) Adjustment for certain scholarships.--The 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) and (b)) 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 student'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 dependent.--If 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 prepayments.--if 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) Denial of double benefit.--No credit shall be allowed
under this section for any expense for which deduction is
allowed under any other provision of this chapter.
``(6) No credit for married individuals filing separate
returns.--If 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) Nonresident aliens.--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) Inflation Adjustment.--
``(1) In general.--In the case of a taxable year beginning
after 2009, the $100,000 amount in subsection (b)(1)(D)(ii)
shall each be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) 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.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $1,000, such amount shall be rounded
to the next lowest multiple of $1,000.
``(f) Regulations.--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 expense which was taken into account in determining the amount
of such credit.''.
(b) Repeal of Deduction for Qualified Tuition and Related
Expenses.--Part VII of subchapter B of chapter 1 of such Code (relating
to additional itemized deductions for individuals) is amended by
striking section 222.
(c) Conforming Amendments.--(1) Section 62(a) of such Code is
amended by striking paragraph (18).
(2) Subparagraph (A) of section 86(b)(2) of such Code is amended by
striking ``, 222''.
(3) Subparagraph (B) of section 72(t)(7) of such Code is amended by
striking ``section 25A(g)(2)'' and inserting ``section 25A(d)(2)''.
(4) Subparagraph (A) of section 135(c)(4) of such Code is amended
by striking ``, 222''.
(5) Subparagraph (A) of section 137(b)(3) of such Code is amended
by striking ``, 222''.
(6) Subparagraph (A) of section 199(d)(2) of such Code is amended
by striking ``, 222''.
(7) Clause (ii) of section 219(g)(3)(A) of such Code is amended by
striking ``, 222''.
(8) Clause (i) of section 221(b)(2)(C) of such Code is amended by
striking ``, 222''.
(9) Clause (iii) of section 469(i)(3)(F) of such Code is amended by
striking ``221, and 222'' and inserting ``and 221''.
(10) Subsection (d) of section 221 of such Code is amended--
(A) by striking ``section 25A(g)(2)'' in paragraph (2)(B)
and inserting ``section 25A(d)(2)'', and
(B) by striking ``section 25A(f)(2)'' in the second
sentence of paragraph (2) and inserting ``section 25A(c)(3)''.
(11) Paragarph (3) of section 221(d) of such Code is amended to
read as follows:
``(3) Eligible student.--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 workload for the course of study the student is
pursuing.''.
(12) Subclause (I) of section 529(c)(3)(B)(v) of such Code is
amended by striking ``section 25A(g)(2)'' and inserting ``section
25A(d)(2)''.
(13) 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)''.
(14) Subclause (I) of section 530(d)(2)(C)(i) of such Code is
amended by striking ``section 25A(g)(2)'' and inserting ``section
25A(d)(2)''.
(15) Clause (iii) of section 530(d)(4)(B) of such Code is amended
by striking ``section 25A(g)(2)'' and inserting ``section 25A(d)(2)''.
(16) 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.''.
(17) Subparagraph (J) of section 6213(g)(2) of such Code is amended
by striking ``section 25A(g)(1)'' and inserting ``section 25A(d)(1)''.
(d) Clerical Amendments.--(1) 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:
``25A. Qualified tuition and related expenses credit.''.
(2) 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.
(e) Effective Date.--The amendments made by this section shall
apply to expenses paid after December 31, 2009, for education furnished
in academic periods beginning after such date.
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