I
111th CONGRESS
1st Session
H. R. 1957
IN THE HOUSE OF REPRESENTATIVES
April 2, 2009
Mr. Peters 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 provide a higher education tuition credit in place of existing education tax incentives.
Short title
This Act may be cited as the
Helping Families Afford Tuition
Act
.
Higher education tuition credit
In general
Section 25A of the Internal Revenue Code of 1986 (relating to Hope and Lifetime Learning credits) is amended to read as follows:
Higher education tuition credit
Allowance of credit
In the case of any eligible student for whom an election is in effect under this section for any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year in an amount equal to 50 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 $10,000.
Limitations
Limitation based on modified adjusted gross income
In general
The amount which would (but for this paragraph) be taken into account under subsection (a) for the taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B).
Amount of reduction
The amount determined under this subparagraph is the amount which bears the same ratio to the amount which would be so taken into account as—
the excess of—
the taxpayer’s modified adjusted gross income for such taxable year, over
$100,000 ($200,000 in the case of a joint return), bears to
$10,000 ($20,000 in the case of a joint return).
Modified adjusted gross income
The term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
Other limitations
Credit allowed only for 5 taxable years
An election to have this section apply with respect to any eligible student may not be made for any taxable year if such an election (by the taxpayer or any other individual) is in effect with respect to such student for any 5 prior taxable years.
Credit allowed for year only if individual is at least 1/2 time student for portion of year
The credit under subsection (a) shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an individual unless such individual is an eligible student for at least one academic period which begins during such year.
Credit allowed only for first 5 years of post secondary education
An election to have this section apply with respect to any eligible student may not be made for any taxable year if the student has completed (before the beginning of such taxable year) 5 years of post secondary education at one or more eligible educational institutions.
Denial of credit if student convicted of a felony drug offense
The credit under subsection (a) shall not be allowed for qualified tuition and related expenses for the enrollment or attendance of a student for any academic period if such student has been convicted of a Federal or State felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within which such period ends.
Definitions
For purposes of this subsection—
Eligible student
The term eligible student means, with respect to any academic period, a student who—
meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of the Taxpayer Relief Act of 1997, and
is carrying at least 1/2 the normal full-time work load for the course of study the student is pursuing.
Qualified tuition and related expenses
In general
The term qualified tuition and related expenses means tuition and fees required for the enrollment or attendance of an eligible student who is—
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 expenses unrelated to an individual's academic course of instruction.
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 the Higher Education Act of 1965.
Special rules
Identification requirement
No credit shall be allowed under subsection (a) to a taxpayer with respect to the qualified tuition and related 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 and related expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced (before the application of subsections (a), (b), and (c)) 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 individual's 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 and related 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 and related 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.
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.
.
Repeal of deduction for qualified tuition and related expenses
In general
Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking section 222 (relating to qualified tuition and related expenses).
Clerical amendment
The table of section for part VII of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 222.
Conforming amendments
Section 62(a) of such Code is amended by striking paragraph (18).
Subparagraph (B)
of section 72(t)(7) of such Code is amended by striking section
25A(g)(2)
and inserting section 25A(d)(2)
.
Section 221(d) of such Code is amended—
by striking
section 25A(g)(2)
in paragraph (2)(B) and inserting
section 25A(d)(2)
,
by striking
section 25A(f)(2)
in paragraph (2)(B) and inserting
section 25A(c)(3)
, and
by striking
section 25A(b)(3)
in paragraph (3) and inserting section
25A(c)(1)
.
Section 529 of such Code is amended—
by striking
section 25A(g)(2)
in subclause (I) of subsection (c)(3)(B)(v)
and inserting section 25A(d)(2)
, and
by striking
section 25A(b)(3)
in clause (i) of subsection (e)(3)(B) and
inserting section 25A(c)(1)
.
Section 530 of such Code is amended—
by striking
section 25A(g)(2)
in subclause (I) of subsection (d)(2)(C)(i)
and inserting section 25A(d)(2)
, and
by striking
section 25A(g)(2)
in clause (iii) of subsection (d)(4)(B) and
inserting section 25A(d)(2)
.
Section 1400O of such Code is amended by adding at the end the following flush sentence:
For purposes of this section, any reference to section 25A shall be treated as a reference to such section before the date of the enactment of this sentence.
.
Subsection (e) of
section 6050S of such Code is amended by striking (without regard to
subsection (g)(2) thereof)
and inserting (without regard to
subsection (d)(2) thereof)
.
Subparagraph (J) of
section 6213(g)(2) of such Code is amended by striking section
25A(g)(1)
and inserting section 25A(d)(1)
.
The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 25A and inserting the following:
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2010.