To amend the Internal Revenue Code of 1986 to allow an increased credit against tax for tuition and related expenses of certain individuals age 55 and older.

Summary: Back to School Act of 2010 - Amends the Internal Revenue Code to allow individual taxpayers who are age 55 or older an income-based tax credit for up to $2,000 of qualified tuition and related expenses, plus 25% of such expenses between $2,000 and $4,000. Adjusts the amount of such credit for inflation beginning after 2011.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Back to School Act of 2010''.

SEC. 2. BACK TO SCHOOL CREDIT.

    (a) In General.--Section 25A of such Code is amended by 
redesignating subsection (j) as subsection (k) and by inserting after 
subsection (i) the following new subsection:
    ``(j) Back to School Credit.--
            ``(1) Amount of credit.--In lieu of the credit allowed 
        under subsection (a), on the election of an eligible 
        individual, there shall be allowed as a credit against the tax 
        imposed by this chapter for the taxable year an amount equal to 
        the sum of--
                    ``(A) so much of the qualified tuition and related 
                expenses paid by the taxpayer during the taxable year 
                (for education furnished during any academic period 
                beginning in such taxable year) as does not exceed 
                $2,000, plus
                    ``(B) 25 percent of such expenses so paid as 
                exceeds $2,000 but does not exceed $4,000.
            ``(2) Limitation based on modified adjusted gross income.--
                    ``(A) In general.--The amount which would (but for 
                this paragraph) be taken into account under paragraph 
                (1) for the taxable year shall be reduced (but not 
                below zero) 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) $10,000 ($20,000 in the case of a 
                        joint return).
                    ``(C) Modified adjusted gross income.--For purposes 
                of this paragraph, 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, $60,000.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Eligible individual.--The term `eligible 
                individual' means any individual--
                            ``(i) who has attained the age of 55, and
                            ``(ii) with respect to whom qualified 
                        tuition and related expenses have not been paid 
                        during the 5-taxable year period ending with 
                        the taxable year immediately preceding the 
                        first taxable year for which such individual 
                        elects the application of this subsection.
                    ``(B) Qualified tuition and related expenses.--
                Notwithstanding subsection (f), the term `qualified 
                tuition and related 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--
                            ``(i) the taxpayer, or
                            ``(ii) the taxpayer's spouse.
            ``(4) Inflation adjustment.--
                    ``(A) Credit limitation.--
                            ``(i) In general.--In the case of a taxable 
                        year beginning after 2011, each of the $2,000 
                        amounts and the $4,000 amount under paragraph 
                        (1) shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) 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.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $100, 
                        such amount shall be rounded to the next lowest 
                        multiple of $100.
                    ``(B) Income limits.--
                            ``(i) In general.--In the case of a taxable 
                        year beginning after 2011, the $80,000 amount 
                        in paragraph (2)(D)(ii) shall each be increased 
                        by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) 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.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $1,000, 
                        such amount shall be rounded to the next lowest 
                        multiple of $1,000.
            ``(5) Denial of credit if student convicted of a felony 
        drug offense.--A rule similar to the rule of subsection 
        (b)(2)(D) shall apply for purposes of this subsection.''.
    (b) Adjustment for Certain Scholarships, etc.--Paragraph (2) of 
section 25A(g) of such Code is amended--
            (1) by inserting ``or (j)'' after ``subsection (a)'', and
            (2) by inserting ``, and paragraphs (1) and (2) of 
        subsection (j)'' after ``and (d)''.
    (c) Treatment of Expenses Paid by Dependent.--Subparagraph (A) of 
section 25A(g)(3) of such Code is amended by inserting ``or (j)'' after 
``subsection (a)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.