I 

113TH CONGRESS 

1ST SESSION H. R. 1738 

To amend the Internal Revenue Code of 1986 to extend and modify the 

American Opportunity Tax Credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 25, 2013 

Mr. DOGGETT (for himself, Mr. DANNY K. DAVIS of Illinois, Mr. BECERRA, 

Mr. BLUMENAUER, Mr. CROWLEY, Mr. KIND, Mr. LARSON of Connecticut, Mr. CARSON of Indiana, Mr. LEWIS, Mr. MCDERMOTT, Mr. 

PASCRELL, Mr. RANGEL, Ms. LINDA T. SA ́NCHEZ of California, Ms. 

SCHWARTZ, Mr. LEVIN, Mr. VAN HOLLEN, Mr. HINOJOSA, Mr. ANDREWS, Mrs. CAPPS, Mr. CA ́RDENAS, Ms. CASTOR of Florida, Mrs. 

CHRISTENSEN, Mr. CICILLINE, Mr. COHEN, Mr. CUELLAR, Mr. CUMMINGS, Ms. FUDGE, Mr. GALLEGO, Mr. GARAMENDI, Mr. AL GREEN of 

Texas, Mr. GENE GREEN of Texas, Mr. HASTINGS of Florida, Mr. HOLT, 

Mr. HONDA, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. LEE of California, Mr. LOEBSACK, Ms. MATSUI, Ms. MCCOLLUM, Ms. MOORE, Mr. 

PASTOR of Arizona, Mr. RYAN of Ohio, Ms. SCHAKOWSKY, Ms. SHEAPORTER, Mr. SHERMAN, Mr. SIRES, Ms. SPEIER, Mr. THOMPSON of Mississippi, Mr. VELA, Mr. WELCH, Mr. YARMUTH, Mr. POCAN, Ms. JACKSON LEE, Mrs. NEGRETE MCLEOD, Mr. VARGAS, Mr. TONKO, Mr. 

DEFAZIO, Mr. GRIJALVA, Ms. EDWARDS, Ms. WILSON of Florida, Ms. 

TITUS, Mrs. DAVIS of California, Mr. NADLER, Mr. RUSH, Ms. BASS, 

Mr. BUTTERFIELD, Mr. CAPUANO, Mr. CLEAVER, Mr. DOYLE, Mr. 

FATTAH, Mr. DEUTCH, Mr. KILDEE, and Mr. PRICE of North Carolina) 

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 extend 

and modify the American Opportunity Tax Credit, and 

for other purposes. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Opportunity 

5 Tax Credit Act of 2013’’. 

6 SEC. 2. EXTENSION AND MODIFICATION OF AMERICAN OP7 PORTUNITY TAX CREDIT. 

8 (a) IN GENERAL.—Section 25A of the Internal Rev9 enue Code of 1986 is amended to read as follows: 

10 ‘‘SEC. 25A. AMERICAN OPPORTUNITY TAX CREDIT. 

11 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in12 dividual who is an eligible student for any taxable year, 

13 there shall be allowed as a credit against the tax imposed 

14 by this chapter for such taxable year the amount deter15 mined under subsection (b) with respect to such indi16 vidual. 

17 ‘‘(b) AMOUNT OF CREDIT.— 

‘‘(1) STUDENT ENROLLED AT LEAST 1 18 ⁄2 TIME.— 

19 In the case of an eligible student who is carrying at 

least 1 20 ⁄2 the normal full-time workload for the course 

21 of study the student is pursuing, the amount deter22 mined under this subsection with respect to such in23 dividual is the sum of— 

24 ‘‘(A) 100 percent of so much of the quali25 fied tuition and related expenses paid by the 


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1 taxpayer during the taxable year (for education 

2 furnished to the eligible student during any 

3 academic period beginning in such taxable year) 

4 as does not exceed $2,000, plus 

5 ‘‘(B) 25 percent of such expenses so paid 

6 as exceeds $2,000 but does not exceed $4,000. 

7 ‘‘(2) OTHER STUDENTS.—In the case of an eli8 gible student not described in paragraph (1), the 

9 amount determined under this subsection with re10 spect to such individual is 25 percent of so much of 

11 the qualified tuition and related expenses paid by 

12 the taxpayer during the taxable year (for education 

13 furnished to the eligible student during any aca14 demic period beginning in such taxable year) as does 

15 not exceed $10,000. 

16 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED

17 GROSS INCOME.— 

18 ‘‘(1) IN GENERAL.—The amount which would 

19 (but for this paragraph) be taken into account under 

20 this section for the taxable year shall be reduced 

21 (but not below zero) by the amount determined 

22 under paragraph (2). 

23 ‘‘(2) AMOUNT OF REDUCTION.—The amount 

24 determined under this paragraph is the amount 


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1 which bears the same ratio to the amount which 

2 would be so taken into account as— 

3 ‘‘(A) the excess of— 

4 ‘‘(i) the taxpayer’s modified adjusted 

5 gross income for such taxable year, over 

6 ‘‘(ii) $80,000 ($160,000 in the case of 

7 a joint return), bears to 

8 ‘‘(B) $10,000 ($20,000 in the case of a 

9 joint return). 

10 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.— 

11 For purposes of this paragraph, the term ‘modified 

12 adjusted gross income’ means the adjusted gross in13 come of the taxpayer for the taxable year increased 

14 by any amount excluded from gross income under 

15 section 911, 931, or 933. 

16 ‘‘(d) OTHER LIMITATIONS AND SPECIAL RULES.— 

17 For purposes of this section: 

18 ‘‘(1) LIFETIME DOLLAR LIMITATION.—In the 

19 case of qualified tuition and related expenses with 

20 respect to any eligible student, the aggregate 

21 amount of the credits allowed in the taxable year 

22 and any prior taxable year for such eligible student 

23 (whether beginning before or after American Oppor24 tunity Tax Credit Act of 2013) shall not exceed 

25 $15,000, determined without regard to whether— 


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1 ‘‘(A) such credits are claimed on the re2 turn of tax filed by the eligible student or by 

3 another taxpayer, or 

4 ‘‘(B) such expenses are treated as paid by 

5 the eligible student or by another taxpayer. 

6 If, in any taxable year, the aggregate amount of 

7 such credits equals or exceeds $15,000, the amount 

8 allowed as a credit under subsection (a) in any sub9 sequent taxable year with respect to such student 

10 shall be zero. 

11 ‘‘(2) IDENTIFICATION REQUIREMENT.—No 

12 credit shall be allowed under this section to a tax13 payer with respect to the qualified tuition and re14 lated expenses of an eligible student unless the tax15 payer includes the name and taxpayer identification 

16 number of such eligible student on the return of tax 

17 for the taxable year. 

18 ‘‘(3) ADJUSTMENT FOR CERTAIN SCHOLAR19 SHIPS, ETC.— 

20 ‘‘(A) IN GENERAL.—The amount of quali21 fied tuition and related expenses otherwise 

22 taken into account under this section with re23 spect to an individual for an academic period 

24 shall be reduced (before the application of sub25 sections (b) and (c)) by the sum of any 


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1 amounts paid for the benefit of such individual 

2 which are allocable to such period as— 

3 ‘‘(i) a qualified scholarship which is 

4 excludable from gross income under section 

5 117, 

6 ‘‘(ii) an educational assistance allow7 ance under chapter 30, 31, 32, 34, or 35 

8 of title 38, United States Code, or under 

9 chapter 1606 of title 10, United States 

10 Code, and 

11 ‘‘(iii) a payment (other than a gift, 

12 bequest, devise, or inheritance within the 

13 meaning of section 102(a)) for such indi14 vidual’s educational expenses, or attrib15 utable to such individual’s enrollment at an 

16 eligible educational institution, which is ex17 cludable from gross income under any law 

18 of the United States. 

19 ‘‘(B) COORDINATION WITH PELL GRANTS

20 NOT USED FOR QUALIFIED TUITION AND RE21 LATED EXPENSES.—Any amount determined 

22 with respect to an individual under subpara23 graph (A) which is attributable to a Federal 

24 Pell Grant under section 401 of the Higher 

25 Education Act of 1965 shall be reduced (but 


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1 not below zero) by the amount of the expenses 

2 (other than qualified tuition and related ex3 penses) which are taken into account in deter4 mining the cost of attendance (as defined in 

5 section 472 of the Higher Education Act of 

6 1965, as in effect on the date of the enactment 

7 of the American Opportunity Tax Credit Act of 

8 2013) of such individual at an eligible edu9 cational institution for the academic period for 

10 which the credit under this section is being de11 termined. 

12 ‘‘(4) TREATMENT OF EXPENSES PAID BY DE13 PENDENT.—If a deduction under section 151 with 

14 respect to an individual is allowed to another tax15 payer for a taxable year beginning in the calendar 

16 year in which such individual’s taxable year begins— 

17 ‘‘(A) no credit shall be allowed under this 

18 section to such individual for such individual’s 

19 taxable year, and 

20 ‘‘(B) qualified tuition and related expenses 

21 paid by such individual during such individual’s 

22 taxable year shall be treated for purposes of 

23 this section as paid by such other taxpayer. 

24 ‘‘(5) TREATMENT OF CERTAIN PREPAY25 MENTS.—If qualified tuition and related expenses 


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1 are paid by the taxpayer during a taxable year for 

2 an academic period which begins during the first 3 

3 months following such taxable year, such academic 

4 period shall be treated for purposes of this section 

5 as beginning during such taxable year. 

6 ‘‘(6) DENIAL OF DOUBLE BENEFIT.—No credit 

7 shall be allowed under this section for any expense 

8 for which a deduction is allowed under any other 

9 provision of this chapter. 

10 ‘‘(7) NO CREDIT FOR MARRIED INDIVIDUALS

11 FILING SEPARATE RETURNS.—If the taxpayer is a 

12 married individual (within the meaning of section 

13 7703), this section shall apply only if the taxpayer 

14 and the taxpayer’s spouse file a joint return for the 

15 taxable year. 

16 ‘‘(8) NONRESIDENT ALIENS.—If the taxpayer is 

17 a nonresident alien individual for any portion of the 

18 taxable year, this section shall apply only if such in19 dividual is treated as a resident alien of the United 

20 States for purposes of this chapter by reason of an 

21 election under subsection (g) or (h) of section 6013. 

22 ‘‘(e) ELECTION NOT TO HAVE SECTION APPLY.—A 

23 taxpayer may elect not to have this section apply with re24 spect to the qualified tuition and related expenses of an 

25 individual for any taxable year. 


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1 ‘‘(f) DEFINITIONS.—For purposes of this section: 

2 ‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 

3 student’ means, with respect to any taxable year, an 

4 individual who— 

5 ‘‘(A) is enrolled for at least one academic 

6 period which begins during such taxable year at 

7 an eligible educational institution, and 

8 ‘‘(B) meets the requirements of section 

9 484(a)(1) of the Higher Education Act of 1965, 

10 as in effect on the date of the enactment of the 

11 American Opportunity Tax Credit Act of 2013. 

12 ‘‘(2) QUALIFIED TUITION AND RELATED EX13 PENSES.— 

14 ‘‘(A) IN GENERAL.—The term ‘qualified 

15 tuition and related expenses’ means tuition, 

16 fees, and course materials required for the en17 rollment or attendance of— 

18 ‘‘(i) the taxpayer, 

19 ‘‘(ii) the taxpayer’s spouse, or 

20 ‘‘(iii) any dependent of the taxpayer 

21 with respect to whom the taxpayer is al22 lowed a deduction under section 151, 

23 at an eligible educational institution for courses 

24 of instruction of such individual at such institu25 tion. 


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1 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV2 ING SPORTS, ETC.—Such term does not include 

3 expenses with respect to any course or other 

4 education involving sports, games, or hobbies, 

5 unless such course or other education is part of 

6 the individual’s degree program. 

7 ‘‘(C) EXCEPTION FOR NONACADEMIC

8 FEES.—Such term does not include student ac9 tivity fees, athletic fees, insurance expenses, or 

10 other expenses unrelated to an individual’s aca11 demic course of instruction. 

12 ‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.— 

13 The term ‘eligible educational institution’ means an 

14 institution— 

15 ‘‘(A) which is described in section 481 of 

16 the Higher Education Act of 1965, as in effect 

17 on the date of the enactment of the American 

18 Opportunity Tax Credit Act of 2013, and 

19 ‘‘(B) which is eligible to participate in a 

20 program under title IV of such Act. 

21 ‘‘(g) PORTION OF CREDIT REFUNDABLE.—Forty 

22 percent of the credit allowed under this section for a tax23 able year (determined after application of subsections 

24 (c)(1) and (d) and without regard to this subsection and 

25 section 26(a)(2), as the case may be) shall be treated as 


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1 a credit allowable under subpart C (and not allowed under 

2 this section). The preceding sentence shall not apply to 

3 any taxpayer for any taxable year if such taxpayer is a 

4 child to whom subsection (g) of section 1 applies for such 

5 taxable year. 

6 ‘‘(h) INFLATION ADJUSTMENT.—In the case of any 

7 taxable year beginning in a calendar year after 2014, each 

8 dollar amount in subsections (b) and (c)(2), and (d)(1) 

9 shall be increased by an amount equal to— 

10 ‘‘(1) such dollar amount, multiplied by 

11 ‘‘(2) the cost-of-living adjustment determined 

12 under section 1(f)(3) for the calendar year in which 

13 the taxable year begins, determined by substituting 

14 ‘calendar year 2013’ for ‘calendar year 1992’ in sub15 paragraph (B) thereof. 

16 In the case of subsections (b) and (d)(1), any increase de17 termined under the preceding sentence shall be rounded 

18 to the nearest multiple of $50. In the case of subsection 

19 (c)(2), any increase determined under the preceding sen20 tence shall be rounded to the nearest multiple of $500. 

21 ‘‘(i) REGULATIONS.—The Secretary may prescribe 

22 such regulations as may be necessary or appropriate to 

23 carry out this section, including regulations providing for 

24 a recapture of the credit allowed under this section in 

25 cases where there is a refund in a subsequent taxable year 


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1 of any amount which was taken into account in deter2 mining the amount of such credit.’’. 

3 (b) RETENTION OF LIMITATION.— 

4 (1) IN GENERAL.—Subparagraph (D) of section 

5 25A(b)(2) of the Internal Revenue Code of 1986, as 

6 in effect before the enactment of the American Op7 portunity Tax Credit Act of 2013 hereby transferred 

8 to section 25A of such Code, as amended by sub9 section (a), and is inserted as a new subsection 

10 (d)(9) of section 25A, as so amended. 

11 (2) CONFORMING AMENDMENT.—Paragraph (9) 

12 of section 25A(d) of such Code, as transferred and 

13 inserted by paragraph (1), is amended by striking 

14 ‘‘The Hope Scholarship Credit under subsection 

15 (a)(1)’’ and inserting ‘‘The credit under subsection 

16 (a)’’. 

17 (c) CLERICAL AMENDMENT.—The item relating to 

18 section 25A in the table of sections for subpart A of part 

19 IV of subchapter A of chapter 1 of the Internal Revenue 

20 Code of 1986 is amended to read as follows: 

‘‘Sec. 25A. American Opportunity Tax Credit.’’. 

21 (d) CONFORMING AMENDMENTS.— 

22 (1) Subparagraph (B) of section 72(t)(7) of 

23 such Code is amended by striking ‘‘25A(g)(2)’’ and 

24 inserting ‘‘25A(d)(3)’’. 


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1 (2) Paragraph (2) of section 221(d) of such 

2 Code is amended— 

3 (A) by striking ‘‘25A(g)(2)’’ in subpara4 graph (B) and inserting ‘‘25A(d)(3)’’, and 

5 (B) by striking ‘‘25A(f)(2)’’ and inserting 

6 ‘‘25A(f)(3)’’. 

7 (3) Paragraph (3) of section 221(d) of such 

8 Code is amended by striking ‘‘25A(b)(3)’’ and in9 serting ‘‘25A(f)(1) (but only with respect to a student who is carrying at least 1 10 ⁄2 the normal full-time 

11 workload for the course of study the student is pur12 suing)’’. 

13 (4) Clause (v) of section 529(c)(3)(B) of such 

14 Code is amended— 

15 (A) by striking ‘‘25A(g)(2)’’ in subclause 

16 (I) and inserting ‘‘25A(d)(3)’’, and 

17 (B) by striking ‘‘HOPE AND LIFETIME

18 LEARNING CREDITS’’ in the heading and insert19 ing ‘‘AMERICAN OPPORTUNITY CREDIT’’. 

20 (5) Clause (i) of section 529(e)(3)(B) of such 

21 Code is amended by striking ‘‘25A(b)(3)’’ and in22 serting ‘‘25A(f)(1) (but only with respect to a student who is carrying at least 1 23 ⁄2 the normal full-time 

24 workload for the course of study the student is pur25 suing)’’. 


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1 (6) Subparagraph (C) of section 530(d)(2) of 

2 such Code is amended— 

3 (A) by striking ‘‘25A(g)(2)’’ in clause (i)(I) 

4 and inserting ‘‘25A(d)(3)’’, and 

5 (B) by striking ‘‘HOPE AND LIFETIME

6 LEARNING CREDITS’’ in the heading and insert7 ing ‘‘AMERICAN OPPORTUNITY CREDIT’’. 

8 (7) Clause (iii) of section 530(d)(4)(B) of such 

9 Code is amended by striking ‘‘25A(g)(2)’’ and in10 serting ‘‘25A(d)(3)’’. 

11 (8) Section 1400O of such Code is amended— 

12 (A) by striking ‘‘25A(f)(2)’’ and inserting 

13 ‘‘25A(f)(3)’’, 

14 (B) by inserting ‘‘(as in effect on the date 

15 of the enactment of this section)’’ after 

16 ‘‘25A(b)(1)’’ in paragraph (2), and 

17 (C) by inserting ‘‘(as in effect on the date 

18 of the enactment of this section)’’ after 

19 ‘‘25A(c)(1)’’ in paragraph (3). 

20 (9) Subsection (e) of section 6050S of such 

21 Code is amended by striking ‘‘subsection (g)(2)’’ and 

22 inserting ‘‘subsection (d)(3)’’. 

23 (10) Subparagraph (A) of section 6211(b)(4) of 

24 such Code is amended by striking ‘‘subsection 

25 (i)(6)’’ and inserting ‘‘subsection (g)’’. 


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1 (11) Subparagraph (J) of section 6213(g)(2) of 

2 such Code is amended by striking ‘‘25A(g)(1)’’ and 

3 inserting ‘‘25A(d)(2)’’. 

4 (e) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to taxable years beginning after 

6 December 31, 2013. 

7 SEC. 3. EXPANSION OF PELL GRANT EXCLUSION FROM 

8 GROSS INCOME. 

9 (a) IN GENERAL.—Paragraph (1) of section 117(b) 

10 of the Internal Revenue Code of 1986 is amended by strik11 ing ‘‘received by an individual’’ and all that follows and 

12 inserting ‘‘received by an individual— 

13 ‘‘(1) as a scholarship or fellowship grant to the 

14 extent the individual establishes that, in accordance 

15 with the conditions of the grant, such amount was 

16 used for qualified tuition and related expenses, or 

17 ‘‘(2) as a Federal Pell Grant under section 401 

18 of the Higher Education Act of 1965 (as in effect 

19 on the date of the enactment of the American Op20 portunity Tax Credit Act of 2013).’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2013. 

Æ 


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