113TH CONGRESS 

2D SESSION H. R. 3393 

AN ACT 

To amend the Internal Revenue Code of 1986 to consolidate 

certain tax benefits for educational expenses, to amend 

the Internal Revenue Code of 1986 to make improvements to the child tax credit, 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, 
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1 SECTION 1. TABLE OF CONTENTS. 

2 The table of contents for this Act is as follows: 

Sec. 1. Table of Contents. 

TITLE I—STUDENT AND FAMILY TAX SIMPLIFICATION ACT 

Sec. 101. Short title. 

Sec. 102. Consolidation of certain tax benefits for educational expenses. 

Sec. 103. Expansion of Pell Grant exclusion from gross income. 

Sec. 104. Budgetary effects. 

TITLE II—CHILD TAX CREDIT IMPROVEMENT ACT 

Sec. 201. Short title. 

Sec. 202. Elimination of marriage penalty in child tax credit; inflation adjustment of credit amount and phaseout thresholds in child tax 

credit. 

Sec. 203. Social security number required to claim the refundable portion of the 

child tax credit. 

Sec. 204. Budgetary effects. 

3 TITLE I—STUDENT AND FAMILY 

4 TAX SIMPLIFICATION ACT 

5 SEC. 101. SHORT TITLE. 

6 This title may be cited as the ‘‘Student and Family 

7 Tax Simplification Act’’. 

8 SEC. 102. CONSOLIDATION OF CERTAIN TAX BENEFITS FOR 

9 EDUCATIONAL EXPENSES. 

10 (a) AMERICAN OPPORTUNITY TAX CREDIT.—Section 

11 25A of the Internal Revenue Code of 1986 is amended 

12 to read as follows: 

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

14 ‘‘(a) IN GENERAL.—In the case of an individual, 

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

16 by this chapter for the taxable year, with respect to each 

17 eligible student, an amount equal to the sum of— 
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1 ‘‘(1) 100 percent of so much of the qualified 

2 tuition and related expenses paid by the taxpayer 

3 during the taxable year (for education furnished to 

4 the eligible student during any academic period be5 ginning in such taxable year) as does not exceed 

6 $2,000, plus 

7 ‘‘(2) 25 percent of so much of such expenses so 

8 paid as exceeds the dollar amount in effect under 

9 paragraph (1) but does not exceed twice such dollar 

10 amount. 

11 ‘‘(b) PORTION OF CREDIT REFUNDABLE.—So much 

12 of the credit allowable under subsection (a) with respect 

13 to each eligible student (determined without regard to this 

14 subsection and section 26(a) and after application of all 

15 other provisions of this section) as does not exceed $1,500 

16 shall be treated as a credit allowable under subpart C (and 

17 not under this part). The preceding sentence shall not 

18 apply to any taxpayer for any taxable year if such tax19 payer is a child to whom section 1(g) applies for such tax20 able year. 

21 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED

22 GROSS INCOME.— 

23 ‘‘(1) IN GENERAL.—The amount allowable as a 

24 credit under subsection (a) for any taxable year shall 

25 be reduced (but not below zero) by an amount which 
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1 bears the same ratio to the amount so allowable (de2 termined without regard to this subsection and sub3 section (b) but after application of all other provi4 sions of this section) as— 

5 ‘‘(A) the excess of— 

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

7 gross income for such taxable year, over 

8 ‘‘(ii) $80,000 (twice such amount in 

9 the case of a joint return), bears to 

10 ‘‘(B) $10,000 (twice such amount in the 

11 case of a joint return). 

12 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— 

13 For purposes of this subsection, the term ‘modified 

14 adjusted gross income’ means the adjusted gross in15 come of the taxpayer for the taxable year increased 

16 by any amount excluded from gross income under 

17 section 911, 931, or 933. 

18 ‘‘(d) OTHER LIMITATIONS.—No credit shall be al19 lowed under this section with respect to any eligible stu20 dent for any taxable year if— 

21 ‘‘(1) such student was taken into account in de22 termining the credit allowed under this section (by 

23 the taxpayer or any other individual) for any 4 prior 

24 taxable years, or 
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1 ‘‘(2) such student has completed (before the be2 ginning of such taxable year) the first 4 years of 

3 postsecondary education at an eligible educational 

4 institution. 

5 ‘‘(e) DEFINITIONS.—For purposes of this section— 

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

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

8 a student who— 

9 ‘‘(A) meets the requirements of section 

10 484(a)(1) of the Higher Education Act of 1965 

11 (20 U.S.C. 1091(a)(1)), as in effect on August 

12 5, 1997, and 

‘‘(B) is carrying at least 1 13 ⁄2 the normal 

14 full-time work load for the course of study the 

15 student is pursuing. 

16 ‘‘(2) QUALIFIED TUITION AND RELATED EX17 PENSES.— 

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

19 tuition and related expenses’ means tuition, 

20 fees, and course materials, required for enroll21 ment or attendance of— 

22 ‘‘(i) the taxpayer, 

23 ‘‘(ii) the taxpayer’s spouse, or 
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1 ‘‘(iii) any dependent of the taxpayer 

2 with respect to whom the taxpayer is al3 lowed a deduction under section 151, 

4 at an eligible educational institution for courses 

5 of instruction of such individual at such institu6 tion. 

7 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV8 ING SPORTS, ETC.—Such term does not include 

9 expenses with respect to any course or other 

10 education involving sports, games, or hobbies, 

11 unless such course or other education is part of 

12 the individual’s degree program. 

13 ‘‘(C) EXCEPTION FOR NONACADEMIC

14 FEES.—Such term does not include student ac15 tivity fees, athletic fees, insurance expenses, or 

16 other expenses unrelated to an individual’s aca17 demic course of instruction. 

18 ‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.— 

19 The term ‘eligible educational institution’ means an 

20 institution— 

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

22 the Higher Education Act of 1965 (20 U.S.C. 

23 1088), as in effect on August 5, 1997, and 

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

25 program under title IV of such Act. 
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1 ‘‘(f) SPECIAL RULES.— 

2 ‘‘(1) IDENTIFICATION REQUIREMENT.—No 

3 credit shall be allowed under subsection (a) to a tax4 payer with respect to the qualified tuition and re5 lated expenses of an individual unless the taxpayer 

6 includes the name and taxpayer identification num7 ber of such individual, and the employer identifica8 tion number of any institution to which such ex9 penses were paid, on the return of tax for the tax10 able year. 

11 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLAR12 SHIPS, ETC.— 

13 ‘‘(A) IN GENERAL.—The amount of quali14 fied tuition and related expenses otherwise 

15 taken into account under subsection (a) with re16 spect to an individual for an academic period 

17 shall be reduced (before the application of sub18 section (c)) by the sum of any amounts paid for 

19 the benefit of such individual which are allo20 cable to such period as— 

21 ‘‘(i) a qualified scholarship which is 

22 excludable from gross income under section 

23 117, 

24 ‘‘(ii) an educational assistance allow25 ance under chapter 30, 31, 32, 34, or 35 
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1 of title 38, United States Code, or under 

2 chapter 1606 of title 10, United States 

3 Code, and 

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

5 bequest, devise, or inheritance within the 

6 meaning of section 102(a)) for such indi7 vidual’s educational expenses, or attrib8 utable to such individual’s enrollment at an 

9 eligible educational institution, which is ex10 cludable from gross income under any law 

11 of the United States. 

12 ‘‘(B) COORDINATION WITH PELL GRANTS

13 NOT USED FOR QUALIFIED TUITION AND RE14 LATED EXPENSES.—For purposes of subpara15 graph (A), the amount of any Federal Pell 

16 Grant under section 401 of the Higher Edu17 cation Act of 1965 (20 U.S.C. 1070a) shall be 

18 reduced (but not below zero) by the amount of 

19 expenses (other than qualified tuition and re20 lated expenses) which are taken into account in 

21 determining the cost of attendance (as defined 

22 in section 472 of the Higher Education Act of 

23 1965, as in effect on the date of the enactment 

24 of this paragraph) of such individual at an eligi25 ble educational institution for the academic pe-
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1 riod for which the credit under this section is 

2 being determined. 

3 ‘‘(3) TREATMENT OF EXPENSES PAID BY DE4 PENDENT.—If a deduction under section 151 with 

5 respect to an individual is allowed to another tax6 payer for a taxable year beginning in the calendar 

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

8 ‘‘(A) no credit shall be allowed under sub9 section (a) to such individual for such individ10 ual’s taxable year, and 

11 ‘‘(B) qualified tuition and related expenses 

12 paid by such individual during such individual’s 

13 taxable year shall be treated for purposes of 

14 this section as paid by such other taxpayer. 

15 ‘‘(4) TREATMENT OF CERTAIN PREPAY16 MENTS.—If qualified tuition and related expenses 

17 are paid by the taxpayer during a taxable year for 

18 an academic period which begins during the first 3 

19 months following such taxable year, such academic 

20 period shall be treated for purposes of this section 

21 as beginning during such taxable year. 

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

23 shall be allowed under this section for any amount 

24 for which a deduction is allowed under any other 

25 provision of this chapter. 
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1 ‘‘(6) NO CREDIT FOR MARRIED INDIVIDUALS

2 FILING SEPARATE RETURNS.—If the taxpayer is a 

3 married individual (within the meaning of section 

4 7703), this section shall apply only if the taxpayer 

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

6 taxable year. 

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

8 a nonresident alien individual for any portion of the 

9 taxable year, this section shall apply only if such in10 dividual is treated as a resident alien of the United 

11 States for purposes of this chapter by reason of an 

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

13 ‘‘(g) INFLATION ADJUSTMENT.— 

14 ‘‘(1) IN GENERAL.—In the case of a taxable 

15 year beginning after 2018, the $2,000 amount in 

16 subsection (a)(1), the $1,500 amount in subsection 

17 (b), and the $80,000 amount in subsection 

18 (c)(1)(A)(ii) shall each be increased by an amount 

19 equal to— 

20 ‘‘(A) such dollar amount, multiplied by 

21 ‘‘(B) the cost-of-living adjustment deter22 mined under section 1(f)(3) for the calendar 

23 year in which the taxable year begins, deter24 mined by substituting ‘calendar year 2017’ for 
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1 ‘calendar year 1992’ in subparagraph (B) 

2 thereof. 

3 ‘‘(2) ROUNDING.—If any amount as adjusted 

4 under paragraph (1) is not a multiple of $100 

5 ($1,000 in the case of the amount in subsection 

6 (c)(1)(A)(ii)), such amount shall be rounded to the 

7 next lowest multiple of $100 ($1,000 in the case of 

8 the amount in subsection (c)(1)(A)(ii)). 

9 ‘‘(h) REGULATIONS.—The Secretary may prescribe 

10 such regulations or other guidance as may be necessary 

11 or appropriate to carry out this section, including regula12 tions providing for a recapture of the credit allowed under 

13 this section in cases where there is a refund in a subse14 quent taxable year of any amount which was taken into 

15 account in determining the amount of such credit.’’. 

16 (b) REQUIREMENT TO REPORT TUITION PAID RATH17 ER THAN TUITION BILLED.—Section 6050S(b)(2)(B)(i) 

18 is amended by striking ‘‘or the aggregate amount billed’’. 

19 (c) REPEAL OF DEDUCTION FOR QUALIFIED TUI20 TION AND RELATED EXPENSES.—Part VII of subchapter 

21 B of chapter 1 of such Code is amended by striking section 

22 222 (and by striking the item relating to such section in 

23 the table of sections for such part). 

24 (d) CONFORMING AMENDMENTS.— 
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1 (1) Section 62(a) of such Code is amended by 

2 striking paragraph (18). 

3 (2) Section 72(t)(7)(B) of such Code is amend4 ed by striking ‘‘section 25A(g)(2)’’ and inserting 

5 ‘‘section 25A(f)(2)’’. 

6 (3) Sections 86(b)(2)(A), 135(c)(4)(A), 

7 137(b)(3)(A), 199(d)(2)(A), 219(g)(3)(A)(ii), and 

8 221(b)(2)(C)(i) of such Code are each amended by 

9 striking ‘‘222,’’. 

10 (4) Section 469(i)(3)(F)(iii) of such Code is 

11 amended by striking ‘‘221, and 222’’ and inserting 

12 ‘‘and 221’’. 

13 (5) Section 529(c)(3)(B)(v)(I) of such Code is 

14 amended by striking ‘‘section 25A(g)(2)’’ and insert15 ing ‘‘section 25A(f)(2)’’. 

16 (6) Section 529(e)(3)(B)(i) of such Code is 

17 amended by striking ‘‘section 25A(b)(3)’’ and insert18 ing ‘‘section 25A(d)’’. 

19 (7) Section 530(d)(2)(C) of such Code is 

20 amended— 

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

22 clause (i)(I) and inserting ‘‘section 25A(f)(2)’’, 

23 and 
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1 (B) by striking ‘‘HOPE AND LIFETIME

2 LEARNING CREDITS’’ in the heading and insert3 ing ‘‘AMERICAN OPPORTUNITY TAX CREDIT’’. 

4 (8) Section 530(d)(4)(B)(iii) of such Code is 

5 amended by striking ‘‘section 25A(g)(2)’’ and insert6 ing ‘‘section 25A(d)(4)(B)’’. 

7 (9) Section 6050S(e) of such Code is amended 

8 by striking ‘‘subsection (g)(2)’’ and inserting ‘‘sub9 section (f)(2)’’. 

10 (10) Section 6211(b)(4)(A) of such Code is 

11 amended by striking ‘‘subsection (i)(6)’’ and insert12 ing ‘‘subsection (b)’’. 

13 (11) Section 6213(g)(2)(J) of such Code is 

14 amended by striking ‘‘TIN required under section 

15 25A(g)(1)’’ and inserting ‘‘TIN, and employer iden16 tification number, required under section 

17 25A(f)(1)’’. 

18 (12) Section 1004(c) of division B of the Amer19 ican Recovery and Reinvestment Tax Act of 2009 is 

20 amended— 

21 (A) in paragraph (1)— 

22 (i) by striking ‘‘section 25A(i)(6)’’ 

23 each place it appears and inserting ‘‘sec24 tion 25A(b)’’, 
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1 (ii) by striking ‘‘with respect to tax2 able years beginning after 2008 and before 

3 2018’’ in subparagraph (A) and inserting 

4 ‘‘with respect to each taxable year’’, and 

5 (iii) by striking ‘‘for taxable years be6 ginning after 2008 and before 2018’’ in 

7 subparagraph (B) and inserting ‘‘for each 

8 taxable year’’, 

9 (B) in paragraph (2), by striking ‘‘Section 

10 25A(i)(6)’’ and inserting ‘‘Section 25A(b)’’, and 

11 (C) in paragraph (3)(C), by striking ‘‘sub12 section (i)(6)’’ and inserting ‘‘subsection (b)’’. 

13 (13) The table of sections for subpart A of part 

14 IV of subchapter A of chapter 1 of the Internal Rev15 enue Code of 1986 is amended by striking the item 

16 relating to section 25A and inserting the following 

17 new item: 

‘‘Sec. 25A. American opportunity tax credit.’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2014. 

21 SEC. 103. EXPANSION OF PELL GRANT EXCLUSION FROM 

22 GROSS INCOME. 

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

24 of the Internal Revenue Code of 1986 is amended— 
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1 (1) by striking the period at the end and insert2 ing ‘‘, or’’, 

3 (2) by striking ‘‘received by an individual as a 

4 scholarship’’ and inserting the following: ‘‘received 

5 by an individual— 

6 ‘‘(A) as a scholarship’’, and 

7 (3) by adding at the end the following new sub8 paragraph: 

9 ‘‘(B) as a Federal Pell Grant under section 

10 401 of the Higher Education Act of 1965 (20 

11 U.S.C. 1070a).’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2014. 

15 SEC. 104. BUDGETARY EFFECTS. 

16 (a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The 

17 budgetary effects of this Act shall not be entered on either 

18 PAYGO scorecard maintained pursuant to section 4(d) of 

19 the Statutory Pay-As-You-Go Act of 2010. 

20 (b) SENATE PAYGO SCORECARDS.—The budgetary 

21 effects of this Act shall not be entered on any PAYGO 

22 scorecard maintained for purposes of section 201 of S. 

23 Con. Res. 21 (110th Congress). 
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1 TITLE II—CHILD TAX CREDIT 

2 IMPROVEMENT ACT 

3 SEC. 201. SHORT TITLE. 

4 This title may be cited as the ‘‘Child Tax Credit Im5 provement Act of 2014’’. 

6 SEC. 202. ELIMINATION OF MARRIAGE PENALTY IN CHILD 

7 TAX CREDIT; INFLATION ADJUSTMENT OF 

8 CREDIT AMOUNT AND PHASEOUT THRESH9 OLDS IN CHILD TAX CREDIT. 

10 (a) ELIMINATION OF MARRIAGE PENALTY.—Section 

11 24(b)(2) of the Internal Revenue Code of 1986 is amended 

12 by striking ‘‘means—’’ and all that follows and inserting 

13 ‘‘means $75,000 (twice such amount in the case of a joint 

14 return).’’. 

15 (b) INFLATION ADJUSTMENT OF CREDIT AMOUNT

16 AND PHASEOUT THRESHOLDS.—Section 24 of such Code 

17 is amended by adding at the end the following new sub18 section: 

19 ‘‘(g) INFLATION ADJUSTMENT.— 

20 ‘‘(1) IN GENERAL.—In the case of any taxable 

21 year beginning after 2014, the $1,000 amount in 

22 subsection (a) and the $75,000 amount in sub23 section (b)(2) shall each be increased by an amount 

24 equal to— 

25 ‘‘(A) such dollar amount, multiplied by 
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1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for the calendar 

3 year in which the taxable year begins, deter4 mined by substituting ‘calendar year 2013’ for 

5 ‘calendar year 1992’ in subparagraph (B) 

6 thereof. 

7 ‘‘(2) ROUNDING.—Any increase determined 

8 under paragraph (1) shall be rounded— 

9 ‘‘(A) in the case of the $1,000 amount in 

10 subsection (a), to the nearest multiple of $50, 

11 and 

12 ‘‘(B) in the case of the $75,000 amount in 

13 subsection (b)(2), to the nearest multiple of 

14 $1,000.’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 December 31, 2014. 

18 SEC. 203. SOCIAL SECURITY NUMBER REQUIRED TO CLAIM 

19 THE REFUNDABLE PORTION OF THE CHILD 

20 TAX CREDIT. 

21 (a) IN GENERAL.—Subsection (d) of section 24 of the 

22 Internal Revenue Code of 1986 is amended by inserting 

23 after paragraph (4) the following new paragraph: 

24 ‘‘(5) IDENTIFICATION REQUIREMENT WITH RE25 SPECT TO TAXPAYER.— 
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1 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

2 not apply to any taxpayer for any taxable year 

3 unless the taxpayer includes the taxpayer’s so4 cial security number on the return of tax for 

5 such taxable year. 

6 ‘‘(B) JOINT RETURNS.—In the case of a 

7 joint return, the requirement of subparagraph 

8 (A) shall be treated as met if the social security 

9 number of either spouse is included on such re10 turn.’’. 

11 (b) OMISSION TREATED AS MATHEMATICAL OR

12 CLERICAL ERROR.—Subparagraph (I) of section 

13 6213(g)(2) of such Code is amended to read as follows: 

14 ‘‘(I) an omission of a correct social secu15 rity number required under section 24(d)(5) 

16 (relating to refundable portion of child tax cred17 it), or a correct TIN required under section 

18 24(e) (relating to child tax credit), to be in19 cluded on a return,’’. 

20 (c) CONFORMING AMENDMENT.—Subsection (e) of 

21 section 24 of such Code is amended by inserting ‘‘WITH

22 RESPECT TO QUALIFYING CHILDREN’’ after ‘‘IDENTI23 FICATION REQUIREMENT’’ in the heading thereof. 
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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 204. BUDGETARY EFFECTS. 

5 (a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The 

6 budgetary effects of this Act shall not be entered on either 

7 PAYGO scorecard maintained pursuant to section 4(d) of 

8 the Statutory Pay-As-You-Go Act of 2010. 

9 (b) SENATE PAYGO SCORECARDS.—The budgetary 

10 effects of this Act shall not be entered on any PAYGO 

11 scorecard maintained for purposes of section 201 of S. 

12 Con. Res. 21 (110th Congress). 

Passed the House of Representatives July 24, 2014. 

Attest: 

Clerk. 
113TH CONGRESS 

2D SESSION H. R. 3393 

AN ACT 

To amend the Internal Revenue Code of 1986 to 

credit, and for other purposes. 1986 to make improvements to the child tax expenses, to amend the Internal Revenue Code of consolidate certain tax benefits for educational