[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6237 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 6237

To amend the Internal Revenue Code of 1986 to coordinate the reduction 
in the American Opportunity Tax Credit with Federal Pell Grants, to the 
 extent such grants are attributable to expenses not eligible for such 
                    credit, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2016

Mr. Danny K. Davis of Illinois 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 coordinate the reduction 
in the American Opportunity Tax Credit with Federal Pell Grants, to the 
 extent such grants are attributable to expenses not eligible for such 
                    credit, and for other purposes.

    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 ``American Opportunity Tax Credit 
Reform Act''.

SEC. 2. AMERICAN OPPORTUNITY TAX CREDIT COORDINATION WITH PELL GRANTS.

    (a) In General.--Section 25A(i) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(8) Coordination with pell grants not used for qualified 
        tuition and related expenses.--For purposes of this subsection, 
        any amount determined with respect to an individual under 
        subsection (g)(2) which is attributable to a Federal Pell Grant 
        under section 401 of the Higher Education Act of 1965 (20 
        U.S.C. 1070a) shall be reduced (but not below zero) by the 
        amount of expenses (other than qualified tuition and related 
        expenses) which are 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 paragraph) of such individual at an eligible 
        educational institution for the academic period for which the 
        credit under this section is being determined.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 3. EXPANSION OF PELL GRANT EXCLUSION FROM GROSS INCOME.

    (a) In General.--Section 117(b)(1) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking the period at the end and inserting ``, 
        or'',
            (2) by striking ``received by an individual as a 
        scholarship'' and inserting the following: ``received by an 
        individual--
                    ``(A) as a scholarship'', and
            (3) by adding at the end the following new subparagraph:
                    ``(B) as a Federal Pell Grant under section 401 of 
                the Higher Education Act of 1965 (20 U.S.C. 1070a).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.
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