[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3393 Engrossed in House (EH)]
113th CONGRESS
2d Session
H. R. 3393
_______________________________________________________________________
AN ACT
To amend the Internal Revenue Code of 1986 to consolidate certain tax
benefits for educational expenses, to amend the Internal Revenue Code
of 1986 to make improvements to the child tax 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. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of Contents.
TITLE I--STUDENT AND FAMILY TAX SIMPLIFICATION ACT
Sec. 101. Short title.
Sec. 102. Consolidation of certain tax benefits for educational
expenses.
Sec. 103. Expansion of Pell Grant exclusion from gross income.
Sec. 104. Budgetary effects.
TITLE II--CHILD TAX CREDIT IMPROVEMENT ACT
Sec. 201. Short title.
Sec. 202. Elimination of marriage penalty in child tax credit;
inflation adjustment of credit amount and
phaseout thresholds in child tax credit.
Sec. 203. Social security number required to claim the refundable
portion of the child tax credit.
Sec. 204. Budgetary effects.
TITLE I--STUDENT AND FAMILY TAX SIMPLIFICATION ACT
SEC. 101. SHORT TITLE.
This title may be cited as the ``Student and Family Tax
Simplification Act''.
SEC. 102. CONSOLIDATION OF CERTAIN TAX BENEFITS FOR EDUCATIONAL
EXPENSES.
(a) American Opportunity Tax Credit.--Section 25A of the Internal
Revenue Code of 1986 is amended to read as follows:
``SEC. 25A. AMERICAN OPPORTUNITY TAX CREDIT.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this chapter for the
taxable year, with respect to each eligible student, an amount equal to
the sum of--
``(1) 100 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 $2,000, plus
``(2) 25 percent of so much of such expenses so paid as
exceeds the dollar amount in effect under paragraph (1) but
does not exceed twice such dollar amount.
``(b) Portion of Credit Refundable.--So much of the credit
allowable under subsection (a) with respect to each eligible student
(determined without regard to this subsection and section 26(a) and
after application of all other provisions of this section) as does not
exceed $1,500 shall be treated as a credit allowable under subpart C
(and not under this part). The preceding sentence shall not apply to
any taxpayer for any taxable year if such taxpayer is a child to whom
section 1(g) applies for such taxable year.
``(c) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount allowable as a credit under
subsection (a) for any taxable year shall be reduced (but not
below zero) by an amount which bears the same ratio to the
amount so allowable (determined without regard to this
subsection and subsection (b) but after application of all
other provisions of this section) as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) $80,000 (twice such amount in the
case of a joint return), bears to
``(B) $10,000 (twice such amount in the case of a
joint return).
``(2) Modified adjusted gross income.--For purposes of this
subsection, 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) Other Limitations.--No credit shall be allowed under this
section with respect to any eligible student for any taxable year if--
``(1) such student was taken into account in determining
the credit allowed under this section (by the taxpayer or any
other individual) for any 4 prior taxable years, or
``(2) such student has completed (before the beginning of
such taxable year) the first 4 years of postsecondary education
at an eligible educational institution.
``(e) Definitions.--For purposes of this section--
``(1) 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 August 5, 1997, and
``(B) is carrying at least \1/2\ the normal full-
time work load for the course of study the student is
pursuing.
``(2) Qualified tuition and related expenses.--
``(A) In general.--The term `qualified tuition and
related expenses' means tuition, fees, and course
materials, required for enrollment or attendance of--
``(i) the taxpayer,
``(ii) the taxpayer's spouse, or
``(iii) any dependent of the taxpayer with
respect to whom the taxpayer is allowed a
deduction under section 151,
at an eligible educational institution for courses of
instruction of such individual at such institution.
``(B) 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.
``(C) 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.
``(3) 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 (20 U.S.C. 1088), as in
effect on August 5, 1997, and
``(B) which is eligible to participate in a program
under title IV of such Act.
``(f) Special Rules.--
``(1) 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, and the employer identification
number of any institution to which such expenses were paid, on
the return of tax for the taxable year.
``(2) Adjustment for certain scholarships, etc.--
``(A) In general.--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 subsection (c)) by the sum of any
amounts paid for the benefit of such individual which
are allocable to such period as--
``(i) a qualified scholarship which is
excludable from gross income under section 117,
``(ii) 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
``(iii) 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.
``(B) Coordination with pell grants not used for
qualified tuition and related expenses.--For purposes
of subparagraph (A), the amount of any 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.
``(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) 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.
``(4) 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.
``(5) Denial of double benefit.--No credit shall be allowed
under this section for any amount for which a 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.
``(g) Inflation Adjustment.--
``(1) In general.--In the case of a taxable year beginning
after 2018, the $2,000 amount in subsection (a)(1), the $1,500
amount in subsection (b), and the $80,000 amount in subsection
(c)(1)(A)(ii) 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 2017' for `calendar year 1992' in
subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $100 ($1,000 in the case of the amount
in subsection (c)(1)(A)(ii)), such amount shall be rounded to
the next lowest multiple of $100 ($1,000 in the case of the
amount in subsection (c)(1)(A)(ii)).
``(h) Regulations.--The Secretary may prescribe such regulations or
other guidance 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.''.
(b) Requirement To Report Tuition Paid Rather Than Tuition
Billed.--Section 6050S(b)(2)(B)(i) is amended by striking ``or the
aggregate amount billed''.
(c) Repeal of Deduction for Qualified Tuition and Related
Expenses.--Part VII of subchapter B of chapter 1 of such Code is
amended by striking section 222 (and by striking the item relating to
such section in the table of sections for such part).
(d) Conforming Amendments.--
(1) Section 62(a) of such Code is amended by striking
paragraph (18).
(2) Section 72(t)(7)(B) of such Code is amended by striking
``section 25A(g)(2)'' and inserting ``section 25A(f)(2)''.
(3) Sections 86(b)(2)(A), 135(c)(4)(A), 137(b)(3)(A),
199(d)(2)(A), 219(g)(3)(A)(ii), and 221(b)(2)(C)(i) of such
Code are each amended by striking ``222,''.
(4) Section 469(i)(3)(F)(iii) of such Code is amended by
striking ``221, and 222'' and inserting ``and 221''.
(5) Section 529(c)(3)(B)(v)(I) of such Code is amended by
striking ``section 25A(g)(2)'' and inserting ``section
25A(f)(2)''.
(6) Section 529(e)(3)(B)(i) of such Code is amended by
striking ``section 25A(b)(3)'' and inserting ``section
25A(d)''.
(7) Section 530(d)(2)(C) of such Code is amended--
(A) by striking ``section 25A(g)(2)'' in clause
(i)(I) and inserting ``section 25A(f)(2)'', and
(B) by striking ``Hope and lifetime learning
credits'' in the heading and inserting ``American
opportunity tax credit''.
(8) Section 530(d)(4)(B)(iii) of such Code is amended by
striking ``section 25A(g)(2)'' and inserting ``section
25A(d)(4)(B)''.
(9) Section 6050S(e) of such Code is amended by striking
``subsection (g)(2)'' and inserting ``subsection (f)(2)''.
(10) Section 6211(b)(4)(A) of such Code is amended by
striking ``subsection (i)(6)'' and inserting ``subsection
(b)''.
(11) Section 6213(g)(2)(J) of such Code is amended by
striking ``TIN required under section 25A(g)(1)'' and inserting
``TIN, and employer identification number, required under
section 25A(f)(1)''.
(12) Section 1004(c) of division B of the American Recovery
and Reinvestment Tax Act of 2009 is amended--
(A) in paragraph (1)--
(i) by striking ``section 25A(i)(6)'' each
place it appears and inserting ``section
25A(b)'',
(ii) by striking ``with respect to taxable
years beginning after 2008 and before 2018'' in
subparagraph (A) and inserting ``with respect
to each taxable year'', and
(iii) by striking ``for taxable years
beginning after 2008 and before 2018'' in
subparagraph (B) and inserting ``for each
taxable year'',
(B) in paragraph (2), by striking ``Section
25A(i)(6)'' and inserting ``Section 25A(b)'', and
(C) in paragraph (3)(C), by striking ``subsection
(i)(6)'' and inserting ``subsection (b)''.
(13) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by striking the item relating to section 25A and
inserting the following new item:
``Sec. 25A. American opportunity tax credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2014.
SEC. 103. EXPANSION OF PELL GRANT EXCLUSION FROM GROSS INCOME.
(a) In General.--Paragraph (1) of section 117(b) 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, 2014.
SEC. 104. BUDGETARY EFFECTS.
(a) Statutory Pay-As-You-Go Scorecards.--The budgetary effects of
this Act shall not be entered on either PAYGO scorecard maintained
pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
(b) Senate PAYGO Scorecards.--The budgetary effects of this Act
shall not be entered on any PAYGO scorecard maintained for purposes of
section 201 of S. Con. Res. 21 (110th Congress).
TITLE II--CHILD TAX CREDIT IMPROVEMENT ACT
SEC. 201. SHORT TITLE.
This title may be cited as the ``Child Tax Credit Improvement Act
of 2014''.
SEC. 202. ELIMINATION OF MARRIAGE PENALTY IN CHILD TAX CREDIT;
INFLATION ADJUSTMENT OF CREDIT AMOUNT AND PHASEOUT
THRESHOLDS IN CHILD TAX CREDIT.
(a) Elimination of Marriage Penalty.--Section 24(b)(2) of the
Internal Revenue Code of 1986 is amended by striking ``means--'' and
all that follows and inserting ``means $75,000 (twice such amount in
the case of a joint return).''.
(b) Inflation Adjustment of Credit Amount and Phaseout
Thresholds.--Section 24 of such Code is amended by adding at the end
the following new subsection:
``(g) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2014, the $1,000 amount in subsection (a) and
the $75,000 amount in subsection (b)(2) 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 2013' for `calendar year 1992' in
subparagraph (B) thereof.
``(2) Rounding.--Any increase determined under paragraph
(1) shall be rounded--
``(A) in the case of the $1,000 amount in
subsection (a), to the nearest multiple of $50, and
``(B) in the case of the $75,000 amount in
subsection (b)(2), to the nearest multiple of
$1,000.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2014.
SEC. 203. SOCIAL SECURITY NUMBER REQUIRED TO CLAIM THE REFUNDABLE
PORTION OF THE CHILD TAX CREDIT.
(a) In General.--Subsection (d) of section 24 of the Internal
Revenue Code of 1986 is amended by inserting after paragraph (4) the
following new paragraph:
``(5) Identification requirement with respect to
taxpayer.--
``(A) In general.--Paragraph (1) shall not apply to
any taxpayer for any taxable year unless the taxpayer
includes the taxpayer's social security number on the
return of tax for such taxable year.
``(B) Joint returns.--In the case of a joint
return, the requirement of subparagraph (A) shall be
treated as met if the social security number of either
spouse is included on such return.''.
(b) Omission Treated as Mathematical or Clerical Error.--
Subparagraph (I) of section 6213(g)(2) of such Code is amended to read
as follows:
``(I) an omission of a correct social security
number required under section 24(d)(5) (relating to
refundable portion of child tax credit), or a correct
TIN required under section 24(e) (relating to child tax
credit), to be included on a return,''.
(c) Conforming Amendment.--Subsection (e) of section 24 of such
Code is amended by inserting ``With Respect to Qualifying Children''
after ``Identification Requirement'' in the heading thereof.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 204. BUDGETARY EFFECTS.
(a) Statutory Pay-As-You-Go Scorecards.--The budgetary effects of
this Act shall not be entered on either PAYGO scorecard maintained
pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
(b) Senate PAYGO Scorecards.--The budgetary effects of this Act
shall not be entered on any PAYGO scorecard maintained for purposes of
section 201 of S. Con. Res. 21 (110th Congress).
Passed the House of Representatives July 24, 2014.
Attest:
Clerk.
113th CONGRESS
2d Session
H. R. 3393
_______________________________________________________________________
AN ACT
To amend the Internal Revenue Code of 1986 to consolidate certain tax
benefits for educational expenses, to amend the Internal Revenue Code
of 1986 to make improvements to the child tax credit, and for other
purposes.