I 

113TH CONGRESS 

1ST SESSION H. R. 3393 

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 

A BILL 

To amend the Internal Revenue Code of 1986 to consolidate 

certain tax benefits for educational 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 ‘‘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 

10 to read as follows: 


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

2 ‘‘(a) IN GENERAL.—In the case of any individual for 

3 any taxable year, there shall be allowed as a credit against 

4 the tax imposed by this chapter for such taxable year an 

5 amount equal to the sum of— 

6 ‘‘(1) 100 percent of so much of the qualified 

7 tuition and related expenses paid by the taxpayer 

8 during the taxable year (for education furnished to 

9 any eligible student for whom an election is in effect 

10 under this section for such taxable year during any 

11 academic period beginning in such taxable year) as 

12 does not exceed $2,000, plus 

13 ‘‘(2) 25 percent of such expenses so paid as ex14 ceeds the dollar amount in effect under paragraph 

15 (1) but does not exceed twice such dollar amount. 

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

17 of the credit allowable under subsection (a) (determined 

18 without regard to this subsection and section 26(a) and 

19 after application of all other provisions of this section) as 

20 does not exceed $1,500 shall be treated as a credit allow21 able under subpart C (and not allowable under subsection 

22 (a)). The preceding sentence shall not apply to any tax23 payer for any taxable year if such taxpayer is a child to 

24 whom section 1(d) applies for such taxable year. 

25 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED

26 GROSS INCOME.— 


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

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

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

4 bears the same ratio to the amount so allowable (de5 termined without regard to this subsection and sub6 section (b) but after application of all other provi7 sions of this section) as— 

8 ‘‘(A) the excess of— 

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

10 gross income for such taxable year, over 

11 ‘‘(ii) $43,000 (twice such amount in 

12 the case of a joint return), bears to 

13 ‘‘(B) $20,000 (twice such amount in the 

14 case of a joint return). 

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

16 For purposes of this subsection, the term ‘modified 

17 adjusted gross income’ means the adjusted gross in18 come of the taxpayer for the taxable year increased 

19 by any amount excluded from gross income under 

20 section 911, 931, or 933. 

21 ‘‘(d) OTHER LIMITATIONS.— 

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

23 YEARS.—An election to have this section apply may 

24 not be made for any taxable year if such an election 

25 (by the taxpayer or any other individual) is in effect 


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1 with respect to such student for any 4 prior taxable 

2 years. 

3 ‘‘(2) CREDIT ALLOWED FOR YEAR ONLY IF INDIVIDUAL IS AT LEAST 1 4 ⁄2 TIME STUDENT FOR POR5 TION OF YEAR.—No credit shall be allowed under 

6 subsection (a) for a taxable year with respect to the 

7 qualified tuition and related expenses of an indi8 vidual unless such individual is an eligible student 

9 for at least one academic period which begins during 

10 such year. 

11 ‘‘(3) CREDIT ALLOWED ONLY FOR FIRST 4

12 YEARS OF POSTSECONDARY EDUCATION.—No credit 

13 shall be allowed under subsection (a) for a taxable 

14 year with respect to the qualified tuition and related 

15 expenses of an eligible student if the student has 

16 completed (before the beginning of such taxable 

17 year) the first 4 years of postsecondary education at 

18 an eligible educational institution. 

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

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

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

22 a student who— 

23 ‘‘(A) meets the requirements of section 

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


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

2 5, 1997, and 

‘‘(B) is carrying at least 1 3 ⁄2 the normal 

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

5 student is pursuing. 

6 ‘‘(2) QUALIFIED TUITION AND RELATED EX7 PENSES.— 

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

9 tuition and related expenses’ means tuition, 

10 fees, and course materials, required for enroll11 ment or attendance of— 

12 ‘‘(i) the taxpayer, 

13 ‘‘(ii) the taxpayer’s spouse, or 

14 ‘‘(iii) any dependent of the taxpayer 

15 with respect to whom the taxpayer is al16 lowed a deduction under section 151, 

17 at an eligible educational institution for courses 

18 of instruction of such individual at such institu19 tion. 

20 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV21 ING SPORTS, ETC.—Such term does not include 

22 expenses with respect to any course or other 

23 education involving sports, games, or hobbies, 

24 unless such course or other education is part of 

25 the individual’s degree program. 


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1 ‘‘(C) EXCEPTION FOR NONACADEMIC

2 FEES.—Such term does not include student ac3 tivity fees, athletic fees, insurance expenses, or 

4 other expenses unrelated to an individual’s aca5 demic course of instruction. 

6 ‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.— 

7 The term ‘eligible educational institution’ means an 

8 institution— 

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

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

11 1088), as in effect on August 5, 1997, and 

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

13 program under title IV of such Act. 

14 ‘‘(f) SPECIAL RULES.— 

15 ‘‘(1) IDENTIFICATION REQUIREMENT.—No 

16 credit shall be allowed under subsection (a) to a tax17 payer with respect to the qualified tuition and re18 lated expenses of an individual unless the taxpayer 

19 includes the name and taxpayer identification num20 ber of such individual, and the employer identifica21 tion number of any institution to which such ex22 penses were paid, on the return of tax for the tax23 able year. 

24 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLAR25 SHIPS, ETC.— 


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1 ‘‘(A) IN GENERAL.—The amount of quali2 fied tuition and related expenses otherwise 

3 taken into account under subsection (a) with re4 spect to an individual for an academic period 

5 shall be reduced (before the application of sub6 section (c)) by the sum of any amounts paid for 

7 the benefit of such individual which are allo8 cable to such period as— 

9 ‘‘(i) a qualified scholarship which is 

10 excludable from gross income under section 

11 117, 

12 ‘‘(ii) an educational assistance allow13 ance under chapter 30, 31, 32, 34, or 35 

14 of title 38, United States Code, or under 

15 chapter 1606 of title 10, United States 

16 Code, and 

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

18 bequest, devise, or inheritance within the 

19 meaning of section 102(a) for such individ20 ual’s educational expenses, or attributable 

21 to such individual’s enrollment at an eligi22 ble educational institution, which is exclud23 able from gross income under any law of 

24 the United States. 


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1 ‘‘(B) COORDINATION WITH PELL GRANTS

2 NOT USED FOR QUALIFIED TUITION AND RE3 LATED EXPENSES.—Any amount determined 

4 with respect to an individual under subpara5 graph (A) which is attributable to a Federal 

6 Pell Grant under section 401 of the Higher 

7 Education Act of 1965 (20 U.S.C. 1070a) shall 

8 be reduced (but not below zero) by the amount 

9 of expenses (other than qualified tuition and re10 lated expenses) which are taken into account in 

11 determining the cost of attendance (as defined 

12 in section 472 of the Higher Education Act of 

13 1965, as in effect on the date of the enactment 

14 of this paragraph) of such individual at an eligi15 ble educational institution for the academic pe16 riod for which the credit under this section is 

17 being determined. 

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) qualified tuition and related expenses 

2 paid by such individual during such individual’s 

3 taxable year shall be treated for purposes of 

4 this section as paid by such other taxpayer. 

5 ‘‘(4) TREATMENT OF CERTAIN PREPAY6 MENTS.—If qualified tuition and related expenses 

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 amount 

14 for which a deduction is allowed under any other 

15 provision 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 ‘‘(g) INFLATION ADJUSTMENT.— 

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

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

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

7 (b), and the $43,000 amount in subsection 

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

9 equal to— 

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

11 ‘‘(B) the cost-of-living adjustment deter12 mined under section 1(f)(3) for the calendar 

13 year in which the taxable year begins, deter14 mined by substituting ‘calendar year 2017’ for 

15 ‘calendar year 1992’ in subparagraph (B) 

16 thereof. 

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

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

19 ($1,000 in the case of the amount in subsection 

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

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

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

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

24 such regulations or other guidance as may be necessary 

25 or appropriate to carry out this section, including regulaVerDate Mar 15 2010 18:21 Nov 05, 2013 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3393.IH H3393

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1 tions providing for a recapture of the credit allowed under 

2 this section in cases where there is a refund in a subse3 quent taxable year of any amount which was taken into 

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

5 (b) REPEAL OF DEDUCTION FOR QUALIFIED TUI6 TION AND RELATED EXPENSES.—Part VII of subchapter 

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

8 222 (and by striking the item relating to such section in 

9 the table of sections for such part). 

10 (c) CONFORMING AMENDMENTS.— 

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

12 striking paragraph (18). 

13 (2) Section 72(t)(7)(B) of such Code is amend14 ed by striking ‘‘section 25A(g)(2)’’ and inserting 

15 ‘‘section 25A(f)(2)’’. 

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

17 amended by striking ‘‘section 25A(g)(2)’’ and insert18 ing ‘‘section 25A(f)(2)’’. 

19 (4) Section 529(e)(3)(B)(i) of such Code is 

20 amended by striking ‘‘section 25A(b)(3)’’ and insert21 ing ‘‘section 25A(d)’’. 

22 (5) Section 530(d)(2)(C) of such Code is 

23 amended— 


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

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

3 and 

4 (B) by striking ‘‘HOPE AND LIFETIME

5 LEARNING CREDITS’’ in the heading and insert6 ing ‘‘AMERICAN OPPORTUNITY TAX CREDIT’’. 

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

8 amended by striking ‘‘section 25A(g)(2)’’ and insert9 ing ‘‘section 25A(d)(4)(B)’’. 

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

11 by striking ‘‘subsection (g)(2)’’ and inserting ‘‘sub12 section (f)(2)’’. 

13 (8) Section 6211(b)(4)(A) of such Code is 

14 amended by striking ‘‘subsection (i)(6)’’ and insert15 ing ‘‘subsection (b)’’. 

16 (9) Section 6213(g)(2)(J) of such Code is 

17 amended by striking ‘‘TIN required under section 

18 25A(g)(1)’’ and inserting ‘‘TIN, and employer iden19 tification number, required under section 

20 25A(f)(1)’’. 

21 (10) Section 1004(c) of division B of the Amer22 ican Recovery and Reinvestment Tax Act of 2009 is 

23 amended— 

24 (A) in paragraph (1)— 


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

2 each place it appears and inserting ‘‘sec3 tion 25A(b)’’, and 

4 (ii) by striking ‘‘with respect to tax5 able years beginning after 2008 and before 

6 2018’’ each place it appears and inserting 

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

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

9 25A(i)(6)’’ and inserting ‘‘Section 25A(b)’’, and 

10 (C) in paragraph (3)(C), by striking ‘‘sub11 section (i)(6)’’ and inserting ‘‘subsection (b)’’. 

12 (11) The table of sections for subpart A of part 

13 IV of subchapter A of chapter 1 of the Internal Rev14 enue Code of 1986 is amended by striking the item 

15 relating to section 25A and inserting the following 

16 new item: 

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

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

18 this section shall apply to taxable years beginning after 

19 December 31, 2014. 

20 SEC. 3. EXPANSION OF PELL GRANT EXCLUSION FROM 

21 GROSS INCOME. 

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

23 of the Internal Revenue Code of 1986 is amended— 

24 (1) by striking the period at the end and insert25 ing ‘‘, or’’, 


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

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

3 by an individual— 

4 ‘‘(A) as a scholarship’’, and 

5 (3) by adding at the end the following new sub6 paragraph: 

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

8 401 of the Higher Education Act of 1965 (20 

9 U.S.C. 1070a).’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2014. 

Æ 


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