I 111th CONGRESS 2d Session H. R. 6455 IN THE HOUSE OF REPRESENTATIVES November 29, 2010 Mr. Fattah 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 permanently extend the American opportunity tax credit increases made to the Hope Scholarship Credit.

1.

Short title

This Act may be cited as the American Opportunity Tax Credit Extension Act of 2010.

2.

Increases in hope scholarship credit made permanent

(a)

In general

Subparagraphs (A) and (B) of section 25A(b)(1) of the Internal Revenue Code of 1986 (relating to Hope Scholarship Credit) are amended to read as follows: (A)100 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 $2,000, plus (B)25 percent of such expenses so paid as exceeds $2,000 but does not exceed the applicable limit. . (b)

Credit allowed for first 4 years of post-Secondary education

Subparagraphs (A) and (C) of section 25A(b)(2) of such Code are amended by striking 2 each place it appears and inserting 4. (c)

Qualified tuition and related expenses To include required course materials

Subparagraph (A) of section 25A(f)(1) of such Code is amended by striking and fees and inserting , fees, and course materials. (d)

Increase in AGI limits

(1)

In general

Paragraph (2) of section 25A(d) of such Code is amended to read as follows: (2)

Amount of reduction

(A)

Hope scholarship credit

In the case of the Hope Scholarship Credit, the amount determined under this paragraph is the amount which bears the same ratio to the credit which would be determined under subsection (a)(1) (without regard to this subsection) as— (i)the excess of— (I)the taxpayer's modified adjusted gross income for such taxable year, over (II)$80,000 ($160,000 in the case of a joint return), bears to (ii)$10,000 ($20,000 in the case of a joint return). (B)

Lifetime learning credit

In the case of the Lifetime Learning Credit, the amount determined under this paragraph is the amount which bears the same ratio to the credit which would be determined under subsection (a)(2) (without regard to this subsection) as— (i)the excess of— (I)the taxpayer's modified adjusted gross income for such taxable year, over (II)$40,000 ($80,000 in the case of a joint return), bears to (ii)$10,000 ($20,000 in the case of a joint return). . (2)

Conforming amendments to inflation adjustments

(A)

Amount of credit

Subparagraph (A) of section 25A(h)(1) of such Code is amended— (i)by striking 2001 and inserting 2010, (ii)by striking calendar year 2000 and inserting calendar year 2009, and (iii)by striking $1,000 and inserting $2,000. (B)

Income limits

(i)Paragraph (2) of section 25A(h) of such Code is amended by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively, and by inserting before subparagraph (B) (as so redesignated) the following new subparagraph: (A)

Hope scholarship credit

In the case of a taxable year beginning after 2010, the $80,000 and $160,000 amounts in subsection (d)(2)(A) 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 2009 for calendar year 1992 in subparagraph (B) thereof. . (ii)Subparagraph (B) of section 25A(h)(2) of such Code, as redesignated by clause (i), is amended— (I)by striking In general in the heading and inserting Lifetime learning credit, and (II)by striking subsection (d)(2) and inserting subsection (d)(2)(B). (C)

Rounding

Subparagraph (C) of section 25A(h)(2) of such Code, as redesignated by subparagraph (B)(i), is amended by inserting or (B) after subparagraph (A). (e)

Credit allowed against minimum tax, Etc

(1)

In general

Subsection (i) of section 25A of such Code is amended by striking paragraphs (1), (2), (3), (4), and (7) and by redesignating paragraphs (5) and (6) as paragraphs (1) and (2), respectively. (2)Paragraph (2) of section 25A(i) of such Code, as redesignated by paragraph (1), is amended— (A)by striking paragraph (4) and inserting subsection (d), and (B)by striking paragraph (5) and inserting paragraph (1). (3)The heading for such subsection (i) is amended to read as follows: (i)

Hope scholarship credit allowed against minimum tax; portion of credit made refundable

. (f)

Effective date

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