[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1120 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1120

 To amend the Internal Revenue Code of 1986 to conform the definitions 
     of qualifying expenses for purposes of education tax benefits.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 21, 2009

 Mrs. Lincoln introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to conform the definitions 
     of qualifying expenses for purposes of education tax benefits.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. HOPE AND LIFETIME LEARNING CREDIT.

    (a) In General.--Section 25A of the Internal Revenue Code of 1986 
is amended--
            (1) by striking ``qualified tuition and related expenses'' 
        each place it appears in subsections (b), (c), (e), (g), and 
        (i) and inserting ``higher education expenses'', and
            (2) by striking paragraph (1) of subsection (f) and 
        inserting the following:
            ``(1) Higher education expenses.--The term `higher 
        education expenses' 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 the Taxpayer Relief Act 
        of 1997) of--
                    ``(A) the taxpayer,
                    ``(B) the taxpayer's spouse, or
                    ``(C) 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) Conforming Amendments.--
            (1) Section 6050S of the Internal Revenue Code of 1986 is 
        amended by striking ``qualified tuition and related expenses'' 
        each place it appears in subsections (a)(2), (b)(2)(B)(i), and 
        (e) and inserting ``higher education expenses''.
            (2) Section 6213(g)(2)(J) of such Code is amended by 
        striking ``tuition and related expenses'' and inserting 
        ``expenses''.
            (3) Section 6724 of such Code is amended by striking 
        ``qualified tuition and related expenses'' each place it 
        appears in subsections (d)(1)(B)(xii) and (d)(2)(BB) and 
        inserting ``higher education expenses''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses paid after December 31, 2008.

SEC. 2. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR HIGHER 
              EDUCATION EXPENSES.

    (a) In General.--Subparagraph (A) of section 72(t)(7) of the 
Internal Revenue Code of 1986 is amended by striking ``means qualified 
higher education expenses'' and all that follows and inserting ``means 
higher education expenses (as defined in section 25A(f)(1)) for 
education furnished to--''
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after December 31, 2008.

SEC. 3. QUALIFIED SCHOLARSHIPS.

    (a) In General.--Subsection (b) of section 117 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``qualified tuition and related expenses'' 
        in paragraph (1) and inserting ``higher education expenses'', 
        and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Higher education expenses.--For purposes of paragraph 
        (1), the term `higher education expenses' 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 the 
        Taxpayer Relief Act of 1997) of a student at an eligible 
        educational institution (as defined in section 25A(f)(2)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts received after December 31, 2008.

SEC. 4. INCOME FROM US SAVINGS BONDS.

    (a) In General.--Section 135(c)(2) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking subparagraphs (A) and (B) and inserting the 
        following:
                    ``(A) Qualified higher education expenses.--The 
                term `qualified higher education expenses' means higher 
                education expenses within the meaning of section 
                25A(f).'', and
            (2) by redesignating subparagraph (C) as subparagraph (B).
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 135 of the Internal Revenue 
        Code of 1986 is amended by striking paragraph (3) and 
        redesignating paragraph (4) as paragraph (3).
            (2) Section 135 of the Internal Revenue Code of 1986 is 
        amended by striking ``tuition and fees'' in the heading and 
        inserting ``expenses''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses paid after December 31, 2008.

SEC. 5. DEDUCTION FOR QUALIFIED TUITION AND RELATED EXPENSES.

    (a) In General.--Subsection (a) of section 222 of the Internal 
Revenue Code of 1986 is amended by striking ``qualified tuition and 
related expenses'' and inserting ``higher education expenses''.
    (b) Definition.--Paragraph (1) of section 222(d) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) Higher education expenses.--The term `higher 
        education expenses' has the meaning given such term by section 
        25A(f). Such expenses shall be reduced in the same manner as 
        under section 25A(g)(2).''.
    (c) Conforming Amendments.--
            (1) Subsections (c)(2)(B), (d)(2), (d)(3)(A), and (d)(3)(B) 
        of section 222 of the Internal Revenue Code of 1986 are each 
        amended by striking ``qualified tuition and related expenses'' 
        and inserting ``higher education expenses''.
            (2) Section 222 of such Code is amended by striking 
        ``qualified tuition and related expenses'' in the heading and 
        inserting ``higher education expenses''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 6. QUALIFIED TUITION PROGRAMS.

    (a) In General.--Paragraph (3) of section 529(e) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(3) Qualified higher education expenses.--The term 
        `qualified higher education expenses' 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 the 
        Taxpayer Relief Act of 1997) of a beneficiary at an eligible 
        educational institution.''.
    (b) Conforming Amendment.--Section 1400O of the Internal Revenue 
Code of 1986 is amended by striking paragraph (1) and redesignating 
paragraphs (2) and (3) as paragraphs (1) and (2), respectively.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2008.
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