I

104TH CONGRESS

1ST SESSION H. R. 2543

To amend the Internal Revenue Code of 1986 to allow a deduction for

tuition and fees for undergraduate and postsecondary vocational education.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 26, 1995

Mr. CHRYSLER 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 allow a

deduction for tuition and fees for undergraduate and

postsecondary vocational education.

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 ‘‘Tuition Tax Deduction

5 Act of 1995’’.

6 SEC. 2. DEDUCTION FOR TUITION AND FEES FOR UNDER7 GRADUATE AND POSTSECONDARY VOCA8 TIONAL EDUCATION.

9 (a) IN GENERAL.—Part VII of subchapter B of chap10 ter 1 of the Internal Revenue Code of 1986 (relating to
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1 additional itemized deductions for individuals) is amended

2 by redesignating section 220 as section 221 and by insert3 ing after section 219 the following new section:

4 ‘‘SEC. 220. TUITION AND FEES FOR UNDERGRADUATE AND

5 POSTSECONDARY VOCATIONAL EDUCATION.

6 ‘‘(a) GENERAL RULE.—In the case of an individual,

7 there shall be allowed as a deduction an amount equal to

8 the qualified educational expenses paid during the taxable

9 year to one or more eligible educational institutions for

10 himself, his spouse, or any of his dependents (as defined

11 in section 152).

12 ‘‘(b) LIMITATION.—The aggregate payments during

13 the taxable year for the qualified educational expenses of

14 an individual which may be taken into account under sub15 section (a) shall not exceed $5,000.

16 ‘‘(c) DEFINITIONS.—For purposes of this section—

17 ‘‘(1) QUALIFIED EDUCATIONAL EXPENSES.—

18 The term ‘qualified educational expenses’ means

19 amounts paid for tuition and fees required for the

20 enrollment or attendance of a student at an eligible

21 educational institution. In the event an amount paid

22 for tuition or fees includes an amount for meals,

23 lodging, or similar expenses which is not separately

24 stated, the portion of such amount which is attrib25 utable to meals, lodging, or similar expenses shall be
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1 determined under regulations prescribed by the Sec2 retary.

3 ‘‘(2) ELIGIBLE EDUCATIONAL INSTITUTION.—

4 ‘‘(A) IN GENERAL.—Except as provided in

5 subparagraph (B), the term ‘eligible educational

6 institution’ has the meaning given to such term

7 by section 135(c)(3).

8 ‘‘(B) INSTITUTIONS WITH EXCESSIVE TUI9 TION INCREASES NOT ELIGIBLE INSTITU10 TIONS.—An institution shall not be treated as

11 an eligible educational institution with respect

12 to any academic year unless such institution

13 certifies to the Secretary (before the most re14 cent July 1 preceding such academic year) that

15 the percentage increase in tuition for such aca16 demic year will not exceed the applicable per17 centage increase in the cost-of-living.

18 ‘‘(C) DEFINITIONS.—For purposes of sub19 paragraph (B)—

20 ‘‘(i) PERCENTAGE INCREASE IN TUI21 TION.—The percentage increase in tuition

22 for an academic year is the percentage (if

23 any) by which the tuition and fees required

24 for the enrollment or attendance of a stu25 dent at such institution for such academic
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1 year exceed such tuition and fees for the

2 preceding academic year.

3 ‘‘(ii) APPLICABLE PERCENTAGE IN4 CREASE IN COST-OF-LIVING.—The applica5 ble percentage increase in the cost-of-living

6 with respect to any academic year is the

7 percentage (if any) by which the CPI for

8 the last calendar year ending before the

9 beginning of such academic year exceeds

10 the CPI for the calendar year preceding

11 such calendar year.

12 ‘‘(iii) CPI FOR CALENDAR YEAR.—

13 The CPI for any calendar year is the aver14 age of the Consumer Price Index (as de15 fined in section 1(f)(5)) as of the close of

16 such calendar year.

17 ‘‘(d) SPECIAL RULES.—

18 ‘‘(1) ADJUSTMENT FOR CERTAIN SCHOLAR19 SHIPS AND VETERANS BENEFITS.—The amounts

20 otherwise taken into account under subsection (a) as

21 qualified educational expenses of any individual dur22 ing any period shall be reduced (before the applica23 tion of subsection (b)) by any amounts received by

24 such individual during such period as—
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1 ‘‘(A) a qualified scholarship (within the

2 meaning of section 117(b)) which under section

3 117 is not includible in gross income, or

4 ‘‘(B) an educational assistance allowance

5 under chapters 32, 34, or 35 of title 38 of the

6 United States Code.

7 ‘‘(2) ELIGIBLE COURSES.—Amounts paid for

8 qualified educational expenses of any individual shall

9 be taken into account under subsection (a) only to

10 the extent such expenses—

11 ‘‘(A) are attributable to courses of instruc12 tion for which credit is allowed toward a recog13 nized degree by an institution of higher edu14 cation or toward a certificate of required course

15 work at a vocational school, and

16 ‘‘(B) are not attributable to any graduate

17 program of such individual.

18 ‘‘(3) INDIVIDUAL MUST BE AT LEAST HALF19 TIME STUDENT.—No deduction shall be allowed

20 under subsection (a) for amounts paid during the

21 taxable year for qualified educational expenses with

22 respect to any individual unless that individual, dur23 ing any 4 calendar months during the calendar year

24 in which the taxable year of the taxpayer begins, is

25 carrying at least one-half the normal full-time work
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1 load for the course of study the student is pursuing,

2 as determined by the eligible education institution.

3 ‘‘(4) TAXPAYER WHO IS DEPENDENT OF AN4 OTHER TAXPAYER.—No deduction shall be allowed

5 to a taxpayer under subsection (a) for amount paid

6 for the education of such taxpayer if such taxpayer

7 is a dependent of another person for a taxable year

8 beginning in the calendar year in which the taxable

9 year of the taxpayer begins.

10 ‘‘(5) SPOUSE.—No deduction shall be allowed

11 under subsection (a) for amounts paid during the

12 taxable year for qualified educational expenses for

13 the spouse of the taxpayer unless—

14 ‘‘(A) the taxpayer is entitled to an exemp15 tion for his spouse under section 151(b) for the

16 taxable year, or

17 ‘‘(B) the taxpayer files a joint return with

18 his spouse for the taxable year.

19 ‘‘(e) COORDINATION WITH OTHER PROVISIONS.—

20 This section shall not apply to any amount which is allow21 able as a deduction under this chapter without regard to

22 this section.

23 ‘‘(f) REGULATIONS.—The Secretary shall prescribe

24 such regulations as may be necessary or appropriate to

25 carry out the provisions of this section.’’
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1 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX2 PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a)

3 of section 62 of such Code is amended by inserting after

4 paragraph (15) the following new paragraph:

5 ‘‘(16) TUITION AND RELATED EXPENSES.—The

6 deduction allowed by section 220.’’

7 (c) CLERICAL AMENDMENT.—The table of sections

8 for part VII of subchapter B of chapter 1 of such Code

9 is amended by striking the last item and inserting the fol10 lowing new items:

‘‘Sec. 220. Tuition and fees for undergraduate and postsecondary

vocational education.

‘‘Sec. 221. Cross reference.’’

11 (d) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to amounts paid after December

13 31, 1995, with respect to education furnished after such

14 date.

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