II
109th CONGRESS
1st Session
S. 575
IN THE SENATE OF THE UNITED STATES
March 9, 2005
Ms. Mikulski (for herself, Mr. Lautenberg, Mrs. Boxer, and Mr. Levin) 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 provide a refundable credit for certain education expenses.
Short title
This Act may be cited as the
Educational Opportunity for All Act of
2005
.
Educational opportunity for all tax credit
In general
Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section:
Educational opportunity tax credit
Allowance of credit
In general
There shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the qualified tuition expenses paid by the taxpayer during the taxable year (for education furnished during any academic period beginning in such taxable year).
Per student limitation
The credit allowed under this section shall not exceed $4,000 with respect to any individual.
Election not to have section apply
A taxpayer may elect not to have this section apply with respect to the qualified tuition expenses of an individual for any taxable year.
Definitions
For purposes of this section—
Qualified tuition expenses
In general
The term qualified tuition expenses means tuition required for the enrollment or attendance of—
the taxpayer,
the taxpayer's spouse, or
any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151,
Exception for education involving sports, etc
Such term does not include expenses with respect to any course or other education involving sports, games, or hobbies, unless such course or other education is part of the individual's degree program.
Exception for nonacademic fees
Such term does not include student activity fees, athletic fees, insurance expenses, or other fees or expenses unrelated to an individual's academic course of instruction.
Job improvement included
Such term shall include tuition expenses described in subparagraph (A) with respect to any course of instruction at an eligible educational institution to acquire or improve job skills.
Eligible educational institution
The term eligible educational institution means an institution—
which is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of the Taxpayer Relief Act of 1997, and
which is eligible to participate in a program under title IV of such Act.
Special rules
Identification requirement
No credit shall be allowed under subsection (a) to a taxpayer with respect to the qualified tuition expenses of an individual unless the taxpayer includes the name and taxpayer identification number of such individual on the return of tax for the taxable year.
Adjustment for certain scholarships, etc
The amount of qualified tuition expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced by the sum of any amounts paid for the benefit of such individual which are allocable to such period as—
a qualified scholarship which is excludable from gross income under section 117,
an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or under chapter 1606 of title 10, United States Code, and
a payment (other
than a gift, bequest, devise, or inheritance within the meaning of section
102(a)) for such individuals educational expenses, or attributable to
such individual
s enrollment at an eligible educational institution,
which is excludable from gross income under any law of the United
States.
Treatment of expenses paid by dependent
If a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins—
no credit shall be allowed under subsection (a) to such individual for such individual's taxable year, and
qualified tuition expenses paid by such individual during such individual's taxable year shall be treated for purposes of this section as paid by such other taxpayer.
Treatment of certain prepayments
If qualified tuition expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first 3 months following such taxable year, such academic period shall be treated for purposes of this section as beginning during such taxable year.
Denial of double benefit
No credit shall be allowed under this section for any expense for which a deduction is allowed under any other provision of this chapter.
Coordination with Hope Scholarship and Lifetime Learning Credits
The qualified tuition and related expenses with respect to an individual for whom a Hope Scholarship Credit or the Lifetime Learning Credit under section 25A is allowed for the taxable year shall not be taken into account under this section.
No credit for married individuals filing separate returns
If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year.
Nonresident aliens
If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013.
Regulations
The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit.
.
Refundability of credit
Paragraph (2) of
section 1324(b) of title 31, United States Code, is amended by inserting before
the period or enacted by the Educational Opportunity for All Act of
2005
.
Conforming amendments
Sections
135(d)(2)(A), 222(c)(2)(A), 529(c)(3)(B)(v)(II), and 530(d)(2)(C)(i)(II) of the
Internal Revenue Code of 1986 are each amended by inserting or section
36
after section 25A
each place it appears.
Section
6213(g)(2)(J) of such Code is amended by inserting or section
36(d)(1)
after expenses)
.
The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 36 and inserting the following:
Sec. 36. Educational opportunity tax credit.
Sec. 37. Overpayments of tax.
.
Effective date
The amendments made by this section shall apply to expenses paid after December 31, 2004, for education furnished in academic periods beginning after such date.