II 

113TH CONGRESS 

1ST SESSION S. 1090 

To amend the Internal Revenue Code of 1986 to consolidate the current 

education tax incentives into one credit against income tax for higher 

education expenses, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 4, 2013 

Mr. RUBIO introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to consolidate 

the current education tax incentives into one credit 

against income tax for higher education expenses, and 

for other purposes. 

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 ‘‘Higher Education and 

5 Skills Obtainment Act’’. 


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1 SEC. 2. CONSOLIDATION OF EDUCATION TAX INCENTIVES 

2 INTO HIGHER EDUCATION AND SKILLS OB3 TAINMENT CREDIT. 

4 (a) IN GENERAL.—Section 25A of the Internal Rev5 enue Code of 1986 (relating to Hope and Lifetime Learn6 ing credits) is amended to read as follows: 

7 ‘‘SEC. 25A. HIGHER EDUCATION AND SKILLS OBTAINMENT 

8 CREDIT. 

9 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 

10 eligible student for whom an election is in effect under 

11 this section for any taxable year, there shall be allowed 

12 as a credit against the tax imposed by this chapter for 

13 the taxable year an amount equal to the sum of— 

14 ‘‘(1) 100 percent of so much of the qualified 

15 tuition and related expenses paid by the taxpayer 

16 during the taxable year (for education furnished to 

17 the eligible student during any academic period be18 ginning in such taxable year) as does not exceed 

19 $2,000, plus 

20 ‘‘(2) 25 percent of such expenses so paid as ex21 ceeds $2,000 but does not exceed $4,000. 

22 ‘‘(b) LIMITATIONS.— 

23 ‘‘(1) CREDIT ALLOWED ONLY FOR 4 TAXABLE

24 YEARS.—The credit under subsection (a) shall not 

25 be allowed for a taxable year with respect to the 

26 qualified tuition and related expenses of an eligible 


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1 student if the student has completed (before the be2 ginning of such taxable year) 4 years of any com3 bination of postsecondary education at an eligible 

4 educational institution and instruction described in 

5 subsection (c)(2)(B). 

6 ‘‘(2) LIMITATION BASED ON HOUSEHOLD IN7 COME.—The amount which would (but for this para8 graph) be taken into account under subsection (a) 

9 for the taxable year shall be reduced (but not below 

10 zero) by the amount which bears the same ratio to 

11 the amount which would be so taken into account as 

12 the excess (if any) of— 

13 ‘‘(A) the household income of the taxpayer 

14 for such taxable year over 400 percent of the 

15 poverty line, bears to 

16 ‘‘(B) the amount equal to 500 percent of 

17 the poverty line minus the amount equal to 400 

18 percent of the poverty line. 

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

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

21 student’ means, with respect to any academic period, 

22 any individual who— 

23 ‘‘(A) meets the requirements of section 

24 484(a)(1) of the Higher Education Act of 1965 

25 (20 U.S.C. 1091(a)(1)), as in effect on the date 


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1 of the enactment of the Taxpayer Relief Act of 

2 1997, and 

3 ‘‘(B) in the case of a student enrolled in 

a degree program, is carrying at least 1 4 ⁄2 the 

5 normal full-time work load for the course of 

6 study the student is pursuing. 

7 ‘‘(2) QUALIFIED TUITION AND RELATED EX8 PENSES.—The term ‘qualified tuition and related ex9 penses’ means tuition, fees, and costs of course ma10 terials— 

11 ‘‘(A) for education during the taxable year 

12 with respect to the attendance at an eligible 

13 educational institution during any academic pe14 riod beginning in such taxable year of— 

15 ‘‘(i) the taxpayer, 

16 ‘‘(ii) the taxpayer’s spouse, or 

17 ‘‘(iii) any dependent of the taxpayer 

18 with respect to whom the taxpayer is al19 lowed a deduction under section 151, and 

20 ‘‘(B) for a course of instruction from an el21 igible provider to acquire or improve job skills 

22 of the individual during the taxable year (for 

23 education furnished during any academic period 

24 beginning in such taxable year). 


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1 ‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.— 

2 The term ‘eligible educational institution’ means an 

3 institution— 

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

5 the Higher Education Act of 1965, as in effect 

6 on the date of the enactment of the Taxpayer 

7 Relief Act of 1997, and 

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

9 program under title IV of the Higher Education 

10 Act of 1965. 

11 ‘‘(4) POVERTY LINE.— 

12 ‘‘(A) IN GENERAL.—The term ‘poverty 

13 line’ has the meaning given that term in section 

14 2110(c)(5) of the Social Security Act (42 

15 U.S.C. 1397jj(c)(5)) with respect to the tax16 payer’s family of the size involved. 

17 ‘‘(B) POVERTY LINE USED.—The poverty 

18 line used shall be the most recently published 

19 poverty line as of the 1st day of the regular en20 rollment period for coverage during such cal21 endar year. 

22 ‘‘(5) ELIGIBLE PROVIDER.—The term ‘eligible 

23 provider’ means provider of training services (within 

24 the meaning of section 134(d)(4)(D) of the Work25 force Investment Act of 1998) (29 U.S.C. 


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1 2864(d)(4)(D)) who is identified in accordance with 

2 section 122(e)(3) of such Act (29 U.S.C. 

3 2842(e)(3)). 

4 ‘‘(d) SPECIAL RULES.— 

5 ‘‘(1) IDENTIFICATION REQUIREMENTS.—No 

6 credit shall be allowed under subsection (a) to a tax7 payer with respect to an eligible student unless the 

8 taxpayer includes on the return of tax for the tax9 able year— 

10 ‘‘(A) the name and social security number 

11 of such student, and 

12 ‘‘(B) the employer identification number, 

13 name, and address of any institution or eligible 

14 provider to which tuition, fees, and costs of 

15 course materials were paid with respect to such 

16 student. 

17 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLAR18 SHIPS.—The expenses otherwise taken into account 

19 under subsection (a) with respect to an individual 

20 for an academic period shall be reduced (before the 

21 application of subsections (a) and (b)) by the sum 

22 of any amounts paid for the benefit of such indi23 vidual which are allocable to such period as— 

24 ‘‘(A) a qualified scholarship which is ex25 cludable from gross income under section 117, 


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1 ‘‘(B) an educational assistance allowance 

2 under chapter 30, 31, 32, 34, or 35 of title 38, 

3 United States Code, or under chapter 1606 of 

4 title 10, United States Code, 

5 ‘‘(C) a Federal Pell Grant or a Federal 

6 supplemental educational opportunity grant 

7 under subparts 1 and 3, respectively, of part A 

8 of title IV of the Higher Education Act of 1965 

9 (20 U.S.C. 1070a and 1070b et seq., respec10 tively), and 

11 ‘‘(D) a payment (other than a gift, be12 quest, devise, or inheritance within the meaning 

13 of section 102(a)) for such student’s edu14 cational expenses, or attributable to such indi15 vidual’s enrollment at an eligible educational in16 stitution, which is excludable from gross income 

17 under any law of the United States. 

18 ‘‘(3) TREATMENT OF EXPENSES PAID BY DE19 PENDENT.—If a deduction under section 151 with 

20 respect to an individual is allowed to another tax21 payer for a taxable year beginning in the calendar 

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

23 ‘‘(A) no credit shall be allowed under sub24 section (a) to such individual for such individ25 ual’s taxable year, and 


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1 ‘‘(B) amounts paid by such individual dur2 ing such individual’s taxable year shall be treat3 ed for purposes of this section as paid by such 

4 other taxpayer. 

5 ‘‘(4) TREATMENT OF CERTAIN PREPAY6 MENTS.—If tuition, fees, or costs of course materials 

7 are paid by the taxpayer during a taxable year for 

8 an academic period which begins during the first 3 

9 months following such taxable year, such academic 

10 period shall be treated for purposes of this section 

11 as beginning during such taxable year. 

12 ‘‘(5) DENIAL OF DOUBLE BENEFIT.—No credit 

13 shall be allowed under this section for any expense 

14 for which deduction is allowed under any other pro15 vision of this chapter. 

16 ‘‘(6) NO CREDIT FOR MARRIED INDIVIDUALS

17 FILING SEPARATE RETURNS.—If the taxpayer is a 

18 married individual (within the meaning of section 

19 7703), this section shall apply only if the taxpayer 

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

21 taxable year. 

22 ‘‘(7) NONRESIDENT ALIENS.—If the taxpayer is 

23 a nonresident alien individual for any portion of the 

24 taxable year, this section shall apply only if such in25 dividual is treated as a resident alien of the United 


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1 States for purposes of this chapter by reason of an 

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

3 ‘‘(8) SUPPORTING INFORMATION.—No expense 

4 shall be taken into account under this section for a 

5 taxable year unless the taxpayer submits with the 

6 return of tax for the taxable year information sup7 porting such expense. 

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

9 taxpayer may elect not to have this section apply with re10 spect to the expenses of an individual for any taxable year. 

11 ‘‘(f) VERIFICATION AND CONFIRMATION OF CERTAIN

12 INFORMATION.—In carrying out this section, the Sec13 retary shall utilize information from the Secretary of Edu14 cation to confirm and verify information relating to edu15 cational institutions and students, including the Inte16 grated Postsecondary Education Data System and the Na17 tional Student Loan Data System. 

18 ‘‘(g) REGULATIONS.—The Secretary may prescribe 

19 such regulations as may be necessary or appropriate to 

20 carry out this section, including regulations providing for 

21 a recapture of the credit allowed under this section in 

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

23 of any expense which was taken into account in deter24 mining the amount of such credit.’’. 


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1 (b) REPEAL OF DEDUCTION FOR QUALIFIED TUI2 TION AND RELATED EXPENSES.— 

3 (1) IN GENERAL.—Part VII of subchapter B of 

4 chapter 1 of such Code (relating to additional 

5 itemized deductions for individuals) is amended by 

6 striking section 222. 

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for part VII of subchapter B of chapter 1 of 

9 such Code is amended by striking the item relating 

10 to section 222. 

11 (c) INFORMATION RETURNS.— 

12 (1) IN GENERAL.—Section 6050S(e) of such 

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

14 inserting ‘‘subsection (d)(2)’’. 

15 (2) ATTENDANCE.—Paragraph (2) of section 

16 6050S(b) of such Code is amended by redesignating 

17 subparagraph (C) as subparagraph (D) and by in18 serting after subparagraph (B) the following new 

19 subparagraph: 

20 ‘‘(C) the status of the individual for each 

21 academic period of the year for which payments 

22 are received as— 

23 ‘‘(i) a full-time or part-time student, 

24 ‘‘(ii) if a part-time student, whether 

25 the individual is at least half time, and 


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1 ‘‘(iii) whether the student is a grad2 uate student.’’. 

3 (d) OMISSION OF IDENTIFICATION INFORMATION

4 AND NUMBER OF YEARS CREDIT IS CLAIMED TREATED

5 AS MATHEMATICAL OR CLERICAL ERROR.—Subparagraph 

6 (J) of section 6213(g)(2) of such Code is amended to read 

7 as follows: 

8 ‘‘(J) in the case of information required 

9 under section 25A (relating to higher education 

10 obtainment credit)— 

11 ‘‘(i) an omission of a correct social se12 curity number and employer identification 

13 number of any institution required to be 

14 included on a return under subsection 

15 (d)(1) of such section, and 

16 ‘‘(ii) an entry on the return claiming 

17 the credit in violation of the limitation 

18 under subsection (b)(1) of such return,’’. 

19 (e) CONFORMING AMENDMENTS.— 

20 (1) Section 62(a) of such Code is amended by 

21 striking paragraph (18). 

22 (2) Subparagraph (A) of section 86(b)(2) of 

23 such Code is amended by striking ‘‘222,’’. 


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

2 such Code is amended by striking ‘‘section 

3 25A(g)(2)’’ and inserting ‘‘section 25A(d)(2)’’. 

4 (4) Subparagraph (A) of section 135(c)(4) of 

5 such Code is amended by striking ‘‘222,’’. 

6 (5) Subparagraph (A) of section 137(b)(3) of 

7 such Code is amended by striking ‘‘222,’’. 

8 (6) Subparagraph (A) of section 199(d)(2) of 

9 such Code is amended by striking ‘‘222,’’. 

10 (7) Clause (ii) of section 219(g)(3)(A) of such 

11 Code is amended by striking ‘‘222,’’. 

12 (8) Clause (i) of section 221(b)(2)(C) of such 

13 Code is amended by striking ‘‘222,’’. 

14 (9) Clause (iii) of section 469(i)(3)(F) of such 

15 Code is amended by striking ‘‘221, and 222’’ and in16 serting ‘‘and 221’’. 

17 (10) Subsection (d) of section 221 of such Code 

18 is amended— 

19 (A) by striking ‘‘section 25A(g)(2)’’ in 

20 paragraph (2)(B) and inserting ‘‘section 

21 25A(d)(2)’’, and 

22 (B) by striking ‘‘section 25A(f)(2)’’ in the 

23 second sentence of paragraph (2) and inserting 

24 ‘‘section 25A(c)(3)’’. 


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1 (11) Section 221(d)(3) of such Code is amend2 ed by striking ‘‘section 25A(b)(3)’’ and inserting 

3 ‘‘section 25A(c)(3)’’. 

4 (12) Subclause (I) of section 529(c)(3)(B)(v) of 

5 such Code is amended by striking ‘‘section 

6 25A(g)(2)’’ and inserting ‘‘25A(d)(2)’’. 

7 (13) Clause (i) of section 529(e)(3)(B) of such 

8 Code is amended by striking ‘‘section 25A(b)(3)’’ 

9 and inserting ‘‘section 221(c)(3)’’. 

10 (14) Subclause (I) of section 530(d)(2)(C)(i) of 

11 such Code is amended by striking ‘‘section 

12 25A(g)(2)’’ and inserting ‘‘section 25A(d)(2)’’. 

13 (15) Clause (iii) of section 530(d)(4)(B) of such 

14 Code is amended by striking ‘‘section 25A(g)(2)’’ 

15 and inserting ‘‘25A(d)(2)’’. 

16 (16) Section 1400O of such Code is amended 

17 by adding at the end the following flush sentence: 

18 ‘‘For purposes of this section, any reference to section 25A 

19 shall be treated as a reference to such section as in effect 

20 on the day before the date of the enactment of this sen21 tence.’’. 

22 (17) The table of sections for subpart A of part 

23 IV of subchapter A of chapter 1 of such Code is 

24 amended by striking the item relating to section 25A 

25 and inserting the following: 

‘‘Sec. 25A. Higher education and skills obtainment credit.’’. 


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1 (f) SENSE OF CONGRESS.—It is the sense of Con2 gress that any savings in revenues resulting from the en3 actment of this section shall be applied to the currently 

4 projected Pell Grant funding shortfall beginning in 2015 

5 and to deficit reduction. 

6 (g) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to expenses paid after December 

8 31, 2013, for education furnished in academic periods be9 ginning after such date. 

Æ 


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