I

103D CONGRESS

1ST SESSION H. R. 401

To amend the Internal Revenue Code of 1986 to provide a Federal income

tax credit for tuition.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. SOLOMON 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 provide

a Federal income tax credit for tuition.

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

3 That (a) subpart A of part IV of subchapter A of chapter

4 1 of the Internal Revenue Code of 1986 (relating to non5 refundable personal credits) is amended by inserting after

6 section 25 the following new section:

7 ‘‘SEC. 25A. TUITION TAX CREDIT.

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

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

10 by this chapter for the taxable year, the amount, deter-
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1 mined under subsection (b), of the educational expenses

2 paid by him during the taxable year to one or more eligible

3 educational institutions for himself, his spouse, or any of

4 his dependents (as defined in section 152).

5 ‘‘(b) LIMITATIONS.—

6 ‘‘(1) AMOUNT PER INDIVIDUAL.—The credit

7 under subsection (a) for the educational expenses of

8 any individual paid in any taxable year shall be

9 equal to so much of such expenses paid with respect

10 to such individual as does not exceed $1,000.

11 ‘‘(2) PRORATION OF CREDIT WHERE MORE

12 THAN ONE TAXPAYER PAYS EXPENSES.—If edu13 cational expenses of an individual are paid by more

14 than one taxpayer during any calendar year, the

15 credit allowable to each such taxpayer under sub16 section (a) for any taxable year beginning in such

17 calendar year shall be the same portion of the credit

18 determined under paragraph (1) for such calendar

19 year which the amount of educational expenses of

20 such individual paid by the taxpayer during such

21 calendar year is of the total amount of educational

22 expenses of such individual paid during such cal23 endar year by all such taxpayers.

24 ‘‘(c) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) EDUCATIONAL EXPENSES.—The term

2 ‘educational expenses’ means amounts paid for—

3 ‘‘(A) tuition and fees required for the en4 rollment or attendance of a student at an eligi5 ble educational institution, and

6 ‘‘(B) fees, books, supplies, and equipment

7 required for courses of instruction at an eligible

8 educational institution.

9 Such term does not include any amount paid, di10 rectly or indirectly, for meals, lodging, or similar

11 personal, living, or family expenses. In the event an

12 amount paid for tuition or fees includes an amount

13 for meals, lodging, or similar expenses which is not

14 separately stated, the portion of such amount which

15 is attributable to meals, lodging, or similar expenses

16 shall be determined under regulations prescribed by

17 the Secretary.

18 ‘‘(2) ELIGIBLE EDUCATIONAL INSTITUTION.—

19 The term ‘eligible educational institution’ means—

20 ‘‘(A) an institution of higher education,

21 ‘‘(B) a vocational school,

22 ‘‘(C) a secondary school, or

23 ‘‘(D) an elementary school.

24 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.—

25 The term ‘institution of higher education’ means the
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1 institutions described in section 1201(a) or 481(a)

2 of the Higher Education Act of 1965.

3 ‘‘(4) VOCATIONAL SCHOOL.—The term ‘voca4 tional school’ means an area vocational education

5 school as defined in section 521(3) of the Carl D.

6 Perkins Vocational Education Act.

7 ‘‘(5) ELEMENTARY AND SECONDARY

8 SCHOOLS.—The terms ‘elementary school’ and ‘sec9 ondary school’ mean, respectively, any elementary or

10 secondary school (as defined in paragraph (7) of sec11 tion 198(a) of the Elementary and Secondary Edu12 cation Act of 1965) which is privately operated but

13 only if it is—

14 ‘‘(A) accredited or approved under State

15 law (or, in the case of school in a State which

16 has no procedure for the accreditation or ap17 proval of privately operated schools, which

18 meets the requirements of State law relating to

19 compulsory school attendance), and

20 ‘‘(B) exempt from taxation under section

21 501(a) as an organization described in section

22 501(c)(3).

23 The terms ‘elementary school’ and ‘secondary school’

24 include facilities which offer education for individ25 uals who are physically or mentally handicapped as
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1 a substitute for public elementary or secondary edu2 cation.

3 ‘‘(d) SPECIAL RULES.—

4 ‘‘(1) ADJUSTMENT FOR CERTAIN SCHOLAR5 SHIPS AND VETERANS BENEFITS.—The amounts

6 otherwise taken into account under subsection (a) as

7 educational expenses of any individual during any

8 period shall be reduced (before the application of

9 subsection (b)) by any amounts received by such in10 dividual during such period as—

11 ‘‘(A) a qualified scholarship (within the

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

13 117 is not includible in gross income, or

14 ‘‘(B) an educational assistance allowance

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

16 United States Code.

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

18 educational expenses of any individual shall be taken

19 into account under subsection (a) only to the extent

20 such expenses—

21 ‘‘(A) are attributable to courses of instruc22 tion offered by an elementary or secondary

23 school, or

24 ‘‘(B) are attributable to courses of instruc25 tion for which credit is allowed toward a bacca-
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1 laureate degree by an institution of higher edu2 cation or toward a certificate of required course

3 work at a vocational school and are not attrib4 utable to any graduate program of such individ5 ual.

6 ‘‘(3) INDIVIDUAL MUST BE AT LEAST HALF7 TIME STUDENT.—No credit shall be allowed under

8 subsection (a) for amounts paid during the taxable

9 year for educational expenses with respect to any in10 dividual unless that individual, during any 4 cal11 endar months during the calendar year in which the

12 taxable year of the taxpayer begins, is at least a

13 half-time student at an eligible education institution.

14 ‘‘(4) SPOUSE.—No credit shall be allowed under

15 subsection (a) for amounts paid during the taxable

16 year for educational expenses for the spouse of the

17 taxpayer unless—

18 ‘‘(A) the taxpayer is entitled to an exemp19 tion for his spouse under section 151(b) for the

20 taxable year, or

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

22 his spouse for the taxable year.

23 ‘‘(e) DISALLOWANCE OF EXPENSES AS DEDUC24 TION.—No deduction shall be allowed under section 162

25 (relating to trade or business expenses) for any edu-
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1 cational expense which (after the application of subsection

2 (b)) is taken into account in determining the amount of

3 any credit allowed under subsection (a). The preceding

4 sentence shall not apply to the educational expenses of any

5 taxpayer who, under regulations prescribed by the Sec6 retary, elects not to apply the provisions of this section

7 with respect to such expenses for the taxable year.

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

9 such regulations as may be necessary to carry out the pro10 visions of this section.’’

11 (b) The table of sections for such subpart A is

12 amended by inserting after the item relating to section 25

13 the following new item:

‘‘Sec. 25A. Expenses of higher education.’’

14 (c) The amendments made by this section shall apply

15 to taxable years beginning after December 31, 1993.

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