I 111th CONGRESS 2d Session H. R. 5557 IN THE HOUSE OF REPRESENTATIVES June 17, 2010 Ms. Giffords (for herself and Mr. Latham) 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 an increased credit against tax for tuition and related expenses of certain individuals age 55 and older.

1.

Short title

This Act may be cited as the Back to School Act of 2010.

2.

Back to School Credit

(a)

In general

Section 25A of such Code is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: (j)

Back to School Credit

(1)

Amount of credit

In lieu of the credit allowed under subsection (a), on the election of an eligible individual, 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)so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished during any academic period beginning in such taxable year) as does not exceed $2,000, plus (B)25 percent of such expenses so paid as exceeds $2,000 but does not exceed $4,000. (2)

Limitation based on modified adjusted gross income

(A)

In general

The amount which would (but for this paragraph) be taken into account under paragraph (1) for the taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B). (B)

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— (i)the excess of— (I)the taxpayer’s modified adjusted gross income for such taxable year, over (II)the applicable amount under subparagraph (D), bears to (ii)$10,000 ($20,000 in the case of a joint return). (C)

Modified adjusted gross income

For purposes of this paragraph, 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 clause (ii) for the taxable year, and (ii)in any other case, $60,000. (3)

Definitions

For purposes of this subsection— (A)

Eligible individual

The term eligible individual means any individual— (i)who has attained the age of 55, and (ii)with respect to whom qualified tuition and related expenses have not been paid during the 5-taxable year period ending with the taxable year immediately preceding the first taxable year for which such individual elects the application of this subsection. (B)

Qualified tuition and related expenses

Notwithstanding subsection (f), the term qualified tuition and related expense means any expense of a type which is taken into account in determining the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, as in effect on the date of the enactment of this section) of a student who is— (i)the taxpayer, or (ii)the taxpayer’s spouse. (4)

Inflation adjustment

(A)

Credit limitation

(i)

In general

In the case of a taxable year beginning after 2011, each of the $2,000 amounts and the $4,000 amount under paragraph (1) shall 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 2010 for calendar year 1992 in subparagraph (B) thereof. (ii)

Rounding

If any amount as adjusted under clause (i) is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100. (B)

Income limits

(i)

In general

In the case of a taxable year beginning after 2011, the $80,000 amount in paragraph (2)(D)(ii) 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 2010 for calendar year 1992 in subparagraph (B) thereof. (ii)

Rounding

If any amount as adjusted under clause (i) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000. (5)

Denial of credit if student convicted of a felony drug offense

A rule similar to the rule of subsection (b)(2)(D) shall apply for purposes of this subsection. . (b)

Adjustment for certain scholarships, etc

Paragraph (2) of section 25A(g) of such Code is amended— (1)by inserting or (j) after subsection (a), and (2)by inserting , and paragraphs (1) and (2) of subsection (j) after and (d). (c)

Treatment of expenses paid by dependent

Subparagraph (A) of section 25A(g)(3) of such Code is amended by inserting or (j) after subsection (a). (d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2010.