[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6033 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 6033
To amend the Internal Revenue Code of 1986 to consolidate education tax
benefits into one credit against income tax for higher education
expenses.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 30, 2010
Mr. Hall of New York 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 consolidate education tax
benefits into one credit against income tax for higher education
expenses.
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 ``Higher Education Affordability Act
of 2010''.
SEC. 2. CONSOLIDATION OF EDUCATION TAX INCENTIVES INTO HIGHER EDUCATION
TAX CREDIT.
(a) In General.--Section 25A of the Internal Revenue Code of 1986
(relating to Hope and Lifetime Learning credits) is amended to read as
follows:
``SEC. 25A. HIGHER EDUCATION TAX CREDIT.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal so much of the higher education
expenses paid by the taxpayer during the taxable year (for education
furnished during any academic period beginning in such taxable year
with respect to each student for whom an election is in effect under
this section for any taxable year) as does not exceed $3,000.
``(b) Limitations.--
``(1) Lifetime credit limitation.--The amount of the credit
allowed under subsection (a) for any taxable year with respect
to any student shall not exceed the excess of--
``(A) $15,000, over
``(B) the aggregate credit allowed under subsection
(a) with respect to such individual for all prior
taxable years.
``(2) Credit limitation based on modified adjusted gross
income.--
``(A) 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 $500) by the amount determined under subparagraph
(B).
``(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--
``(i) the excess of--
``(I) the taxpayer's modified
adjusted gross income for such taxable
year, over
``(II) the applicable amount under
subparagraph (D), bears to
``(ii) $24,000 ($48,000 in the case of a
joint return).
``(C) 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.
``(D) Applicable amount.--The applicable amount
under this subparagraph is--
``(i) in the case of a joint return, 200
percent of the dollar amount in effect under
clause (ii) for the taxable year, and
``(ii) in any other case, $80,000.
``(3) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for the taxable year shall
not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
subpart (other than this section and section 23) and
section 27 for the taxable year.
``(c) Definitions.--For purposes of this subsection--
``(1) Higher education expense.--The term `higher education
expense' 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 this section) of a student who
is--
``(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 with respect to the
attendance of such student at such institution for the academic
period for which the credit under this section is being
determined.
``(2) Eligible educational institution.--The term `eligible
educational institution' means an institution--
``(A) which is described in section 481 of the
Higher Education Act of 1965, as in effect on the date
of the enactment of the Taxpayer Relief Act of 1997,
and
``(B) which is eligible to participate in a program
under title IV of such Act.
``(d) Special Rules.--
``(1) Identification requirement.--No credit shall be
allowed under subsection (a) to a taxpayer with respect to any
individual unless the taxpayer includes the name and taxpayer
identification number of such student on the return of tax for
the taxable year.
``(2) Adjustment for certain scholarships.--The amount of
higher education 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) and (b)) by the sum of any amounts paid for the benefit of
such individual which are allocable to such period as--
``(A) a qualified scholarship which is excludable
from gross income under section 117,
``(B) 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
``(C) a payment (other than a gift, bequest,
devise, or inheritance within the meaning of section
102(a)) for such student'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.
``(3) 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--
``(A) no credit shall be allowed under subsection
(a) to such individual for such individual's taxable
year, and
``(B) higher education 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.
``(4) Treatment of certain prepayments.--If higher
education expense is 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.
``(5) Denial of double benefit.--No credit shall be allowed
under this section for any expense for which deduction is
allowed under any other provision of this chapter.
``(6) 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.
``(7) 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.
``(e) Portion of Credit Refundable.--The aggregate credits allowed
to a taxpayer under subpart C shall be increased by 20 percent of the
portion of the amount of the credit which would have been allowed to
the taxpayer under this section without regard to this subsection and
the limitation under section 26(a)(2) or subsection (b)(4), as the case
may be. The amount of the credit allowed under this subsection shall
not be treated as a credit allowed under this subpart and shall reduce
the amount of credit otherwise allowable under subsection (a) without
regard to section 26(a)(2) or subsection (b)(3), as the case may be.
``(f) Election Not To Have Section Apply.--A taxpayer may elect not
to have this section apply with respect to the higher education
expenses of an individual for any taxable year.
``(g) Inflation Adjustment.--
``(1) In general.--In the case of a taxable year beginning
after 2011, the $3,000 and $15,000 amount in subsections (a)
and (b)(1), respectively, shall each be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2010' for `calendar year 1992' in
subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $1,000, such amount shall
be rounded to the next lowest multiple of $1,000.
``(h) 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 expense which was taken into account in determining the amount
of such credit.''.
(b) Elimination of 529 Plan Reduction for Education Credit.--Clause
(v) of section 529(c)(3)(B) of such Code is amended by striking ``shall
be reduced'' and all that follows through the period at the end and
inserting the following ``shall be reduced as provided in section
25A(g)(2).''.
(c) Conforming Amendments.--
(1) Subparagraph (B) of section 24(b)(3) of such Code is
amended by striking ``25A(i)'' and inserting ``25A''.
(2) Clause (ii) of section 25(e)(1)(C) of such Code is
amended by striking ``2A(i)'' inserting ``25A''.
(3) Paragraph (2) of section 25B(g) of such Code is amended
by striking ``25A(i)'' and inserting ``25A''.
(4) Paragraph (2) of section 1400C(d) of such Code is
amended by striking ``25A(i)'' and inserting ``25A''.
(5) Section 62(a) of such Code is amended by striking
paragraph (18).
(6) Subparagraph (A) of section 86(b)(2) of such Code is
amended by striking ``, 222''.
(7) Subparagraph (B) of section 72(t)(7) of such Code is
amended by striking ``section 25A(g)(2)'' and inserting
``section 25A(d)(2)''.
(8) Subparagraph (A) of section 135(c)(4) of such Code is
amended by striking ``, 222''.
(9) Subparagraph (A) of section 137(b)(3) of such Code is
amended by striking ``, 222''.
(10) Subparagraph (A) of section 199(d)(2) of such Code is
amended by striking ``, 222''.
(11) Clause (ii) of section 219(g)(3)(A) of such Code is
amended by striking ``, 222''.
(12) Clause (i) of section 221(b)(2)(C) of such Code is
amended by striking ``, 222''.
(13) Clause (iii) of section 469(i)(3)(F) of such Code is
amended by striking ``221, and 222'' and inserting ``and 221''.
(14) Subsection (d) of section 221 of such Code is
amended--
(A) by striking ``section 25A(g)(2)'' in paragraph
(2)(B) and inserting ``section 25A(d)(2)'', and
(B) by striking ``section 25A(f)(2)'' in the second
sentence of paragraph (2) and inserting ``section
25A(c)(2)''.
(15) Paragraph (3) of section 221(d) of such Code is
amended to read as follows:
``(3) Eligible student.--The term `eligible student' means,
with respect to any academic period, a student who--
``(A) 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
``(B) is carrying at least \1/2\ the normal full-
time workload for the course of study the student is
pursuing.''.
(16) Subclause (I) of section 529(c)(3)(B)(v) of such Code,
as amended by this Act, is amended by striking ``section
25A(g)(2)'' and inserting ``25A(d)(2)''.
(17) Clause (i) of section 529(e)(3)(B) of such Code is
amended by striking ``section 25A(b)(3)'' and inserting
``section 221(d)(3)''.
(18) Subclause (I) of section 530(d)(2)(C)(i) of such Code
is amended by striking ``section 25A(g)(2)'' and inserting
``section 25A(d)(2)''.
(19) Clause (iii) of section 530(d)(4)(B) of such Code is
amended by striking ``section 25A(g)(2)'' and inserting
``25A(d)(2)''.
(20) 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 as in effect on the day
before the date of the enactment of this sentence.''.
(21) Subsection (e) of section 6050S of such Code is
amended by striking ``subsection (g)(2)'' and inserting
``subsection (d)(2)''.
(22) Subparagraph (J) of section 6213(g)(2) of such Code is
amended by striking ``section 25A(g)(1) (relating to higher
education tuition and related expenses)'' and inserting
``section 25A(d)(1) (relating to higher education tax
credit)''.
(23) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``, 25A,'' after ``section
35''.
(d) Effective Date.--The amendments made by this section shall
apply to expenses paid after December 31, 2010, for education furnished
in academic periods beginning after such date.
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