Tuition Tax Deduction Act of 1995

Summary: Tuition Tax Deduction Act of 1995 - Amends the Internal Revenue Code to allow an individual a deduction in an amount equal to the qualified education expenses paid for tuition and fees for the taxpayer, spouse, or any dependents to one or more eligible undergraduate and postsecondary vocational schools. Limits the deduction to $5,000. Allows the deduction whether or not the taxpayer itemizes other deductions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tuition Tax Deduction Act of 1995''.

SEC. 2. DEDUCTION FOR TUITION AND FEES FOR UNDERGRADUATE AND 
              POSTSECONDARY VOCATIONAL EDUCATION.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 220 as 
section 221 and by inserting after section 219 the following new 
section:

``SEC. 220. TUITION AND FEES FOR UNDERGRADUATE AND POSTSECONDARY 
              VOCATIONAL EDUCATION.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the qualified educational 
expenses paid during the taxable year to one or more eligible 
educational institutions for himself, his spouse, or any of his 
dependents (as defined in section 152).
    ``(b) Limitation.--The aggregate payments during the taxable year 
for the qualified educational expenses of an individual which may be 
taken into account under subsection (a) shall not exceed $5,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified educational expenses.--The term `qualified 
        educational expenses' means amounts paid for tuition and fees 
        required for the enrollment or attendance of a student at an 
        eligible educational institution. In the event an amount paid 
        for tuition or fees includes an amount for meals, lodging, or 
        similar expenses which is not separately stated, the portion of 
        such amount which is attributable to meals, lodging, or similar 
        expenses shall be determined under regulations prescribed by 
        the Secretary.
            ``(2) Eligible educational institution.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `eligible educational 
                institution' has the meaning given to such term by 
                section 135(c)(3).
                    ``(B) Institutions with excessive tuition increases 
                not eligible institutions.--An institution shall not be 
                treated as an eligible educational institution with 
                respect to any academic year unless such institution 
                certifies to the Secretary (before the most recent July 
                1 preceding such academic year) that the percentage 
                increase in tuition for such academic year will not 
                exceed the applicable percentage increase in the cost-
                of-living.
                    ``(C) Definitions.--For purposes of subparagraph 
                (B)--
                            ``(i) Percentage increase in tuition.--The 
                        percentage increase in tuition for an academic 
year is the percentage (if any) by which the tuition and fees required 
for the enrollment or attendance of a student at such institution for 
such academic year exceed such tuition and fees for the preceding 
academic year.
                            ``(ii) Applicable percentage increase in 
                        cost-of-living.--The applicable percentage 
                        increase in the cost-of-living with respect to 
                        any academic year is the percentage (if any) by 
                        which the CPI for the last calendar year ending 
                        before the beginning of such academic year 
                        exceeds the CPI for the calendar year preceding 
                        such calendar year.
                            ``(iii) CPI for calendar year.--The CPI for 
                        any calendar year is the average of the 
                        Consumer Price Index (as defined in section 
                        1(f)(5)) as of the close of such calendar year.
    ``(d) Special Rules.--
            ``(1) Adjustment for certain scholarships and veterans 
        benefits.--The amounts otherwise taken into account under 
        subsection (a) as qualified educational expenses of any 
        individual during any period shall be reduced (before the 
        application of subsection (b)) by any amounts received by such 
        individual during such period as--
                    ``(A) a qualified scholarship (within the meaning 
                of section 117(b)) which under section 117 is not 
                includible in gross income, or
                    ``(B) an educational assistance allowance under 
                chapters 32, 34, or 35 of title 38 of the United States 
                Code.
            ``(2) Eligible courses.--Amounts paid for qualified 
        educational expenses of any individual shall be taken into 
        account under subsection (a) only to the extent such expenses--
                    ``(A) are attributable to courses of instruction 
                for which credit is allowed toward a recognized degree 
                by an institution of higher education or toward a 
                certificate of required course work at a vocational 
                school, and
                    ``(B) are not attributable to any graduate program 
                of such individual.
            ``(3) Individual must be at least half-time student.--No 
        deduction shall be allowed under subsection (a) for amounts 
        paid during the taxable year for qualified educational expenses 
        with respect to any individual unless that individual, during 
        any 4 calendar months during the calendar year in which the 
        taxable year of the taxpayer begins, is carrying at least one-
        half the normal full-time work load for the course of study the 
        student is pursuing, as determined by the eligible education 
        institution.
            ``(4) Taxpayer who is dependent of another taxpayer.--No 
        deduction shall be allowed to a taxpayer under subsection (a) 
        for amount paid for the education of such taxpayer if such 
        taxpayer is a dependent of another person for a taxable year 
        beginning in the calendar year in which the taxable year of the 
        taxpayer begins.
            ``(5) Spouse.--No deduction shall be allowed under 
        subsection (a) for amounts paid during the taxable year for 
        qualified educational expenses for the spouse of the taxpayer 
        unless--
                    ``(A) the taxpayer is entitled to an exemption for 
                his spouse under section 151(b) for the taxable year, 
                or
                    ``(B) the taxpayer files a joint return with his 
                spouse for the taxable year.
    ``(e) Coordination With Other Provisions.--This section shall not 
apply to any amount which is allowable as a deduction under this 
chapter without regard to this section.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the provisions of this 
section.''
    (b) Deduction Allowed Whether or Not Taxpayer Itemizes Other 
Deductions.--Subsection (a) of section 62 of such Code is amended by 
inserting after paragraph (15) the following new paragraph:
            ``(16) Tuition and related expenses.--The deduction allowed 
        by section 220.''
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following new items:

                              ``Sec. 220. Tuition and fees for 
                                        undergraduate and postsecondary 
                                        vocational education.
                              ``Sec. 221. Cross reference.''
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid after December 31, 1995, with respect to 
education furnished after such date.