[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5878 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 5878

To amend the Internal Revenue Code of 1986 to expand deductions allowed 
 for education-related expenses and to extend the American Opportunity 
                              Tax Credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 31, 2012

  Mrs. Lowey 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 expand deductions allowed 
 for education-related expenses and to extend the American Opportunity 
                              Tax Credit.

    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 ``Deductibility and Incentives to 
Promote Learning Opportunities and Maximize Assistance Act of 2012'' or 
as the ``DIPLOMA Act of 2012''.

SEC. 2. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

    (a) Elimination of Dollar Limitation for Qualified Tuition and 
Related Expenses Deduction.--Subsection (b) of section 222 of the 
Internal Revenue Code of 1986 (relating to qualified tuition and 
related expenses) is amended to read as follows:
    ``(b) Limitation Based on Adjusted Gross Income.--
            ``(1) In general.--In the case of a taxpayer whose adjusted 
        gross income for a taxable year exceeds $80,000 ($160,000 in 
        the case of a joint return), the amount of the deduction 
        allowed under subsection (a) for the taxable year shall be 
        zero.
            ``(2) Adjusted gross income.--For purposes of this 
        subsection, adjusted gross income shall be determined--
                    ``(A) without regard to this section and sections 
                199, 911, 931, and 933, and
                    ``(B) after application of sections 86, 135, 137, 
                219, 221, and 469.''.
    (b) Termination.--Subsection (e) of section 222 of such Code is 
amended by striking ``December 31, 2011'' and inserting ``December 31, 
2017''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2011.

SEC. 3. INTEREST AND PRINCIPAL ON EDUCATION LOANS.

    (a) Expansion of Deduction for Interest on Education Loans To 
Include Principal Payments.--Section 221 of the Internal Revenue Code 
of 1986 (relating to interest on education loans) is amended--
            (1) in subsection (a), by striking ``interest paid'' and 
        inserting ``interest and principal paid'',
            (2) by redesignating subsections (d), (e), and (f) as 
        subsections (e), (f), and (g), respectively,
            (3) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Limit on Period Deduction Allowed.--With respect to principal 
paid on any qualified education loan after the first 60 months (whether 
or not consecutive) in which principal payments are required, a 
deduction shall not be allowed under this section. For purposes of this 
paragraph, any loan and all refinancings of such loan shall be treated 
as 1 loan. Such 60 months shall be determined in the manner prescribed 
by the Secretary in the case of multiple loans which are refinanced by, 
or serviced as, a single loan and in the case of loans incurred before 
the date of the enactment of this section.'', and
            (4) in the heading, by striking ``interest'' and inserting 
        ``interest and principal''.
    (b) Clerical Amendments.--The item relating to section 221 in the 
table of sections for part VII of subchapter B of chapter 1 of such 
Code is amended to read as follows:

``Sec. 221. Interest and principal on education loans.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2011.

SEC. 4. EXTENSION OF AMERICAN OPPORTUNITY TAX CREDIT.

    (a) In General.--Subsection (i) of section 25A of the Internal 
Revenue Code of 1986 is amended by striking ``in 2009, 2010, 2011, or 
2012'' in the matter preceding paragraph (1) and inserting ``after 2008 
and before 2018''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.
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