IB 

Union Calendar No. 392 

113TH CONGRESS 

2D SESSION H. R. 3393 

[Report No. 113–526] 

To amend the Internal Revenue Code of 1986 to consolidate certain tax 

benefits for educational expenses, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 30, 2013 

Mrs. BLACK (for herself and Mr. DANNY K. DAVIS of Illinois) introduced the 

following bill; which was referred to the Committee on Ways and Means 

JULY 17, 2014 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on October 30, 2013] 


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A BILL 

To amend the Internal Revenue Code of 1986 to consolidate 

certain tax benefits for educational expenses, 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 ‘‘Student and Family 

5 Tax Simplification Act’’. 

6 SEC. 2. CONSOLIDATION OF CERTAIN TAX BENEFITS FOR 

7 EDUCATIONAL EXPENSES. 

8 (a) AMERICAN OPPORTUNITY TAX CREDIT.—Section 

9 25A of the Internal Revenue Code of 1986 is amended to 

10 read as follows: 

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

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

13 shall be allowed as a credit against the tax imposed by this 

14 chapter for the taxable year, with respect to each eligible 

15 student, an amount equal to the sum of— 

16 ‘‘(1) 100 percent of so much of the qualified tui17 tion and related expenses paid by the taxpayer dur18 ing the taxable year (for education furnished to the el19 igible student during any academic period beginning 

20 in such taxable year) as does not exceed $2,000, plus 

21 ‘‘(2) 25 percent of so much of such expenses so 

22 paid as exceeds the dollar amount in effect under 

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

24 amount. 


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

2 the credit allowable under subsection (a) with respect to 

3 each eligible student (determined without regard to this sub4 section and section 26(a) and after application of all other 

5 provisions of this section) as does not exceed $1,500 shall 

6 be treated as a credit allowable under subpart C (and not 

7 under this part). The preceding sentence shall not apply 

8 to any taxpayer for any taxable year if such taxpayer is 

9 a child to whom section 1(g) applies for such taxable year. 

10 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED

11 GROSS INCOME.— 

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

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

14 be reduced (but not below zero) by an amount which 

15 bears the same ratio to the amount so allowable (de16 termined without regard to this subsection and sub17 section (b) but after application of all other provi18 sions of this section) as— 

19 ‘‘(A) the excess of— 

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

21 gross income for such taxable year, over 

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

23 the case of a joint return), bears to 

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

25 case of a joint return). 


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1 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.—For 

2 purposes of this subsection, the term ‘modified ad3 justed gross income’ means the adjusted gross income 

4 of the taxpayer for the taxable year increased by any 

5 amount excluded from gross income under section 

6 911, 931, or 933. 

7 ‘‘(d) OTHER LIMITATIONS.—No credit shall be allowed 

8 under this section with respect to any eligible student for 

9 any taxable year if— 

10 ‘‘(1) such student was taken into account in de11 termining the credit allowed under this section (by 

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

13 taxable years, or 

14 ‘‘(2) such student has completed (before the be15 ginning of such taxable year) the first 4 years of post16 secondary education at an eligible educational insti17 tution. 

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

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

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

21 a student who— 

22 ‘‘(A) meets the requirements of section 

23 484(a)(1) of the Higher Education Act of 1965 

24 (20 U.S.C. 1091(a)(1)), as in effect on August 5, 

25 1997, and 


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‘‘(B) is carrying at least 1 1 ⁄2 the normal full2 time work load for the course of study the stu3 dent is pursuing. 

4 ‘‘(2) QUALIFIED TUITION AND RELATED EX5 PENSES.— 

6 ‘‘(A) IN GENERAL.—The term ‘qualified tui7 tion and related expenses’ means tuition, fees, 

8 and course materials, required for enrollment or 

9 attendance of— 

10 ‘‘(i) the taxpayer, 

11 ‘‘(ii) the taxpayer’s spouse, or 

12 ‘‘(iii) any dependent of the taxpayer 

13 with respect to whom the taxpayer is al14 lowed a deduction under section 151, 

15 at an eligible educational institution for courses 

16 of instruction of such individual at such institu17 tion. 

18 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV19 ING SPORTS, ETC.—Such term does not include 

20 expenses with respect to any course or other edu21 cation involving sports, games, or hobbies, unless 

22 such course or other education is part of the in23 dividual’s degree program. 

24 ‘‘(C) EXCEPTION FOR NONACADEMIC

25 FEES.—Such term does not include student acVerDate Mar 15 2010 21:48 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H3393.RH H3393

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1 tivity fees, athletic fees, insurance expenses, or 

2 other expenses unrelated to an individual’s aca3 demic course of instruction. 

4 ‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.—The 

5 term ‘eligible educational institution’ means an insti6 tution— 

7 ‘‘(A) which is described in section 481 of the 

8 Higher Education Act of 1965 (20 U.S.C. 1088), 

9 as in effect on August 5, 1997, and 

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

11 program under title IV of such Act. 

12 ‘‘(f) SPECIAL RULES.— 

13 ‘‘(1) IDENTIFICATION REQUIREMENT.—No credit 

14 shall be allowed under subsection (a) to a taxpayer 

15 with respect to the qualified tuition and related ex16 penses of an individual unless the taxpayer includes 

17 the name and taxpayer identification number of such 

18 individual, and the employer identification number of 

19 any institution to which such expenses were paid, on 

20 the return of tax for the taxable year. 

21 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLARSHIPS, 

22 ETC.— 

23 ‘‘(A) IN GENERAL.—The amount of quali24 fied tuition and related expenses otherwise taken 

25 into account under subsection (a) with respect to 


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1 an individual for an academic period shall be 

2 reduced (before the application of subsection (c)) 

3 by the sum of any amounts paid for the benefit 

4 of such individual which are allocable to such 

5 period as— 

6 ‘‘(i) a qualified scholarship which is 

7 excludable from gross income under section 

8 117, 

9 ‘‘(ii) an educational assistance allow10 ance under chapter 30, 31, 32, 34, or 35 of 

11 title 38, United States Code, or under chap12 ter 1606 of title 10, United States Code, 

13 and 

14 ‘‘(iii) a payment (other than a gift, be15 quest, devise, or inheritance within the 

16 meaning of section 102(a)) for such individ17 ual’s educational expenses, or attributable to 

18 such individual’s enrollment at an eligible 

19 educational institution, which is excludable 

20 from gross income under any law of the 

21 United States. 

22 ‘‘(B) COORDINATION WITH PELL GRANTS

23 NOT USED FOR QUALIFIED TUITION AND RE24 LATED EXPENSES.—For purposes of subpara25 graph (A), the amount of any Federal Pell Grant 


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1 under section 401 of the Higher Education Act 

2 of 1965 (20 U.S.C. 1070a) shall be reduced (but 

3 not below zero) by the amount of expenses (other 

4 than qualified tuition and related expenses) 

5 which are taken into account in determining the 

6 cost of attendance (as defined in section 472 of 

7 the Higher Education Act of 1965, as in effect on 

8 the date of the enactment of this paragraph) of 

9 such individual at an eligible educational insti10 tution for the academic period for which the 

11 credit under this section is being determined. 

12 ‘‘(3) TREATMENT OF EXPENSES PAID BY DE13 PENDENT.—If a deduction under section 151 with re14 spect to an individual is allowed to another taxpayer 

15 for a taxable year beginning in the calendar year in 

16 which such individual’s taxable year begins— 

17 ‘‘(A) no credit shall be allowed under sub18 section (a) to such individual for such individ19 ual’s taxable year, and 

20 ‘‘(B) qualified tuition and related expenses 

21 paid by such individual during such individ22 ual’s taxable year shall be treated for purposes of 

23 this section as paid by such other taxpayer. 

24 ‘‘(4) TREATMENT OF CERTAIN PREPAYMENTS.—If 

25 qualified tuition and related expenses are paid by the 


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1 taxpayer during a taxable year for an academic pe2 riod which begins during the first 3 months following 

3 such taxable year, such academic period shall be 

4 treated for purposes of this section as beginning dur5 ing such taxable year. 

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

7 shall be allowed under this section for any amount for 

8 which a deduction is allowed under any other provi9 sion of this chapter. 

10 ‘‘(6) NO CREDIT FOR MARRIED INDIVIDUALS FIL11 ING SEPARATE RETURNS.—If the taxpayer is a mar12 ried individual (within the meaning of section 7703), 

13 this section shall apply only if the taxpayer and the 

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

15 year. 

16 ‘‘(7) 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 ‘‘(g) INFLATION ADJUSTMENT.— 

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

24 beginning after 2018, the $2,000 amount in sub25 section (a)(1), the $1,500 amount in subsection (b), 


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1 and the $80,000 amount in subsection (c)(1)(A)(ii) 

2 shall each be increased by an amount equal to— 

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

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar year 

6 in which the taxable year begins, determined by 

7 substituting ‘calendar year 2017’ for ‘calendar 

8 year 1992’ in subparagraph (B) thereof. 

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

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

11 ($1,000 in the case of the amount in subsection 

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

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

14 amount in subsection (c)(1)(A)(ii)). 

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

16 such regulations or other guidance as may be necessary or 

17 appropriate to carry out this section, including regulations 

18 providing for a recapture of the credit allowed under this 

19 section in cases where there is a refund in a subsequent 

20 taxable year of any amount which was taken into account 

21 in determining the amount of such credit.’’. 

22 (b) REQUIREMENT TO REPORT TUITION PAID RATHER

23 THAN TUITION BILLED.—Section 6050S(b)(2)(B)(i) is 

24 amended by striking ‘‘or the aggregate amount billed’’. 


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1 (c) REPEAL OF DEDUCTION FOR QUALIFIED TUITION

2 AND RELATED EXPENSES.—Part VII of subchapter B of 

3 chapter 1 of such Code is amended by striking section 222 

4 (and by striking the item relating to such section in the 

5 table of sections for such part). 

6 (d) CONFORMING AMENDMENTS.— 

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

8 striking paragraph (18). 

9 (2) Section 72(t)(7)(B) of such Code is amended 

10 by striking ‘‘section 25A(g)(2)’’ and inserting ‘‘section 

11 25A(f)(2)’’. 

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

13 137(b)(3)(A), 199(d)(2)(A), 219(g)(3)(A)(ii), and 

14 221(b)(2)(C)(i) of such Code are each amended by 

15 striking ‘‘222,’’. 

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

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

18 ‘‘and 221’’. 

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

20 amended by striking ‘‘section 25A(g)(2)’’ and insert21 ing ‘‘section 25A(f)(2)’’. 

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

23 amended by striking ‘‘section 25A(b)(3)’’ and insert24 ing ‘‘section 25A(d)’’. 


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1 (7) Section 530(d)(2)(C) of such Code is amend2 ed— 

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

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

5 and 

6 (B) by striking ‘‘HOPE AND LIFETIME

7 LEARNING CREDITS’’ in the heading and insert8 ing ‘‘AMERICAN OPPORTUNITY TAX CREDIT’’. 

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

10 amended by striking ‘‘section 25A(g)(2)’’ and insert11 ing ‘‘section 25A(d)(4)(B)’’. 

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

13 striking ‘‘subsection (g)(2)’’ and inserting ‘‘subsection 

14 (f)(2)’’. 

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

16 amended by striking ‘‘subsection (i)(6)’’ and inserting 

17 ‘‘subsection (b)’’. 

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

19 amended by striking ‘‘TIN required under section 

20 25A(g)(1)’’ and inserting ‘‘TIN, and employer identi21 fication number, required under section 25A(f)(1)’’. 

22 (12) Section 1004(c) of division B of the Amer23 ican Recovery and Reinvestment Tax Act of 2009 is 

24 amended— 

25 (A) in paragraph (1)— 


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1 (i) by striking ‘‘section 25A(i)(6)’’ each 

2 place it appears and inserting ‘‘section 

3 25A(b)’’, 

4 (ii) by striking ‘‘with respect to taxable 

5 years beginning after 2008 and before 

6 2018’’ in subparagraph (A) and inserting 

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

8 (iii) by striking ‘‘for taxable years be9 ginning after 2008 and before 2018’’ in sub10 paragraph (B) and inserting ‘‘for each tax11 able year’’, 

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

13 25A(i)(6)’’ and inserting ‘‘Section 25A(b)’’, and 

14 (C) in paragraph (3)(C), by striking ‘‘sub15 section (i)(6)’’ and inserting ‘‘subsection (b)’’. 

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

17 IV of subchapter A of chapter 1 of the Internal Rev18 enue Code of 1986 is amended by striking the item re19 lating to section 25A and inserting the following new 

20 item: 

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

21 (e) EFFECTIVE DATE.—The amendments made by this 

22 section shall apply to taxable years beginning after Decem23 ber 31, 2014. 


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1 SEC. 3. EXPANSION OF PELL GRANT EXCLUSION FROM 

2 GROSS INCOME. 

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

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking the period at the end and insert6 ing ‘‘, or’’, 

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

8 scholarship’’ and inserting the following: ‘‘received by 

9 an individual— 

10 ‘‘(A) as a scholarship’’, and 

11 (3) by adding at the end the following new sub12 paragraph: 

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

14 401 of the Higher Education Act of 1965 (20 

15 U.S.C. 1070a).’’. 

16 (b) EFFECTIVE DATE.—The amendments made by this 

17 section shall apply to taxable years beginning after Decem18 ber 31, 2014. 


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Union Calendar No. 392 

113TH CONGRESS 

2D SESSION H. R. 3393 

[Report No. 113–526] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

expenses, and for other purposes. consolidate certain tax benefits for educational 

JULY 17, 2014 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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