I 

111TH CONGRESS 

2D SESSION H. R. 6033 

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

benefits into one credit against income tax for higher education expenses. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 30, 2010 

Mr. HALL of New York 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 

education tax benefits into one credit against income 

tax for higher education expenses. 

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 Af5 fordability Act of 2010’’. 

6 SEC. 2. CONSOLIDATION OF EDUCATION TAX INCENTIVES 

7 INTO HIGHER EDUCATION TAX CREDIT. 

8 (a) IN GENERAL.—Section 25A of the Internal Rev9 enue Code of 1986 (relating to Hope and Lifetime Learn10 ing credits) is amended to read as follows: 


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1 ‘‘SEC. 25A. HIGHER EDUCATION TAX CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual, there shall be allowed as a credit against the tax 

4 imposed by this chapter for the taxable year an amount 

5 equal so much of the higher education expenses paid by 

6 the taxpayer during the taxable year (for education fur7 nished during any academic period beginning in such tax8 able year with respect to each student for whom an elec9 tion is in effect under this section for any taxable year) 

10 as does not exceed $3,000. 

11 ‘‘(b) LIMITATIONS.— 

12 ‘‘(1) LIFETIME CREDIT LIMITATION.—The 

13 amount of the credit allowed under subsection (a) 

14 for any taxable year with respect to any student 

15 shall not exceed the excess of— 

16 ‘‘(A) $15,000, over 

17 ‘‘(B) the aggregate credit allowed under 

18 subsection (a) with respect to such individual 

19 for all prior taxable years. 

20 ‘‘(2) CREDIT LIMITATION BASED ON MODIFIED

21 ADJUSTED GROSS INCOME.— 

22 ‘‘(A) IN GENERAL.—The amount which 

23 would (but for this paragraph) be taken into ac24 count under subsection (a) for the taxable year 

25 shall be reduced (but not below $500) by the 

26 amount determined under subparagraph (B). 


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1 ‘‘(B) AMOUNT OF REDUCTION.—The 

2 amount determined under this subparagraph is 

3 the amount which bears the same ratio to the 

4 amount which would be so taken into account 

5 as— 

6 ‘‘(i) the excess of— 

7 ‘‘(I) the taxpayer’s modified ad8 justed gross income for such taxable 

9 year, over 

10 ‘‘(II) the applicable amount 

11 under subparagraph (D), bears to 

12 ‘‘(ii) $24,000 ($48,000 in the case of 

13 a joint return). 

14 ‘‘(C) MODIFIED ADJUSTED GROSS IN15 COME.—The term ‘modified adjusted gross in16 come’ means the adjusted gross income of the 

17 taxpayer for the taxable year increased by any 

18 amount excluded from gross income under sec19 tion 911, 931, or 933. 

20 ‘‘(D) APPLICABLE AMOUNT.—The applica21 ble amount under this subparagraph is— 

22 ‘‘(i) in the case of a joint return, 200 

23 percent of the dollar amount in effect 

24 under clause (ii) for the taxable year, and 

25 ‘‘(ii) in any other case, $80,000. 


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1 ‘‘(3) LIMITATION BASED ON AMOUNT OF

2 TAX.—In the case of a taxable year to which section 

3 26(a)(2) does not apply, the credit allowed under 

4 subsection (a) for the taxable year shall not exceed 

5 the excess of— 

6 ‘‘(A) the sum of the regular tax liability 

7 (as defined in section 26(b)) plus the tax im8 posed by section 55, over 

9 ‘‘(B) the sum of the credits allowable 

10 under this subpart (other than this section and 

11 section 23) and section 27 for the taxable year. 

12 ‘‘(c) DEFINITIONS.—For purposes of this sub13 section— 

14 ‘‘(1) HIGHER EDUCATION EXPENSE.—The term 

15 ‘higher education expense’ means any expense of a 

16 type which is taken into account in determining the 

17 cost of attendance (as defined in section 472 of the 

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

19 date of the enactment of this section) of a student 

20 who is— 

21 ‘‘(A) the taxpayer, 

22 ‘‘(B) the taxpayer’s spouse, or 

23 ‘‘(C) any dependent of the taxpayer with 

24 respect to whom the taxpayer is allowed a de25 duction under section 151, 


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1 at an eligible educational institution with respect to 

2 the attendance of such student at such institution 

3 for the academic period for which the credit under 

4 this section is being determined. 

5 ‘‘(2) ELIGIBLE EDUCATIONAL INSTITUTION.— 

6 The term ‘eligible educational institution’ means an 

7 institution— 

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

9 the Higher Education Act of 1965, as in effect 

10 on the date of the enactment of the Taxpayer 

11 Relief Act of 1997, and 

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

13 program under title IV of such Act. 

14 ‘‘(d) SPECIAL RULES.— 

15 ‘‘(1) IDENTIFICATION REQUIREMENT.—No 

16 credit shall be allowed under subsection (a) to a tax17 payer with respect to any individual unless the tax18 payer includes the name and taxpayer identification 

19 number of such student on the return of tax for the 

20 taxable year. 

21 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLAR22 SHIPS.—The amount of higher education expenses 

23 otherwise taken into account under subsection (a) 

24 with respect to an individual for an academic period 

25 shall be reduced (before the application of subVerDate Mar 15 2010 23:53 Aug 03, 2010 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6033.IH H6033

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1 sections (a) and (b)) by the sum of any amounts 

2 paid for the benefit of such individual which are allo3 cable to such period as— 

4 ‘‘(A) a qualified scholarship which is ex5 cludable from gross income under section 117, 

6 ‘‘(B) an educational assistance allowance 

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

8 United States Code, or under chapter 1606 of 

9 title 10, United States Code, and 

10 ‘‘(C) a payment (other than a gift, be11 quest, devise, or inheritance within the meaning 

12 of section 102(a)) for such student’s edu13 cational expenses, or attributable to such indi14 vidual’s enrollment at an eligible educational in15 stitution, which is excludable from gross income 

16 under any law of the United States. 

17 ‘‘(3) TREATMENT OF EXPENSES PAID BY DE18 PENDENT.—If a deduction under section 151 with 

19 respect to an individual is allowed to another tax20 payer for a taxable year beginning in the calendar 

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

22 ‘‘(A) no credit shall be allowed under sub23 section (a) to such individual for such individ24 ual’s taxable year, and 


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1 ‘‘(B) higher education expenses paid by 

2 such individual during such individual’s taxable 

3 year shall be treated for purposes of this section 

4 as paid by such other taxpayer. 

5 ‘‘(4) TREATMENT OF CERTAIN PREPAY6 MENTS.—If higher education expense is paid by the 

7 taxpayer during a taxable year for an academic pe8 riod which begins during the first 3 months fol9 lowing such taxable year, such academic period shall 

10 be treated for purposes of this section as beginning 

11 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 ‘‘(e) PORTION OF CREDIT REFUNDABLE.—The ag4 gregate credits allowed to a taxpayer under subpart C 

5 shall be increased by 20 percent of the portion of the 

6 amount of the credit which would have been allowed to 

7 the taxpayer under this section without regard to this sub8 section and the limitation under section 26(a)(2) or sub9 section (b)(4), as the case may be. The amount of the 

10 credit allowed under this subsection shall not be treated 

11 as a credit allowed under this subpart and shall reduce 

12 the amount of credit otherwise allowable under subsection 

13 (a) without regard to section 26(a)(2) or subsection 

14 (b)(3), as the case may be. 

15 ‘‘(f) ELECTION NOT TO HAVE SECTION APPLY.—A 

16 taxpayer may elect not to have this section apply with re17 spect to the higher education expenses of an individual for 

18 any taxable year. 

19 ‘‘(g) INFLATION ADJUSTMENT.— 

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

21 year beginning after 2011, the $3,000 and $15,000 

22 amount in subsections (a) and (b)(1), respectively, 

23 shall each be increased by an amount equal to— 

24 ‘‘(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 2010’ for 

5 ‘calendar year 1992’ in subparagraph (B) 

6 thereof. 

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

8 under subparagraph (A) is not a multiple of $1,000, 

9 such amount shall be rounded to the next lowest 

10 multiple of $1,000. 

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

12 such regulations as may be necessary or appropriate to 

13 carry out this section, including regulations providing for 

14 a recapture of the credit allowed under this section in 

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

16 of any expense which was taken into account in deter17 mining the amount of such credit.’’. 

18 (b) ELIMINATION OF 529 PLAN REDUCTION FOR

19 EDUCATION CREDIT.—Clause (v) of section 529(c)(3)(B) 

20 of such Code is amended by striking ‘‘shall be reduced’’ 

21 and all that follows through the period at the end and 

22 inserting the following ‘‘shall be reduced as provided in 

23 section 25A(g)(2).’’. 

24 (c) CONFORMING AMENDMENTS.— 


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1 (1) Subparagraph (B) of section 24(b)(3) of 

2 such Code is amended by striking ‘‘25A(i)’’ and in3 serting ‘‘25A’’. 

4 (2) Clause (ii) of section 25(e)(1)(C) of such 

5 Code is amended by striking ‘‘2A(i)’’ inserting 

6 ‘‘25A’’. 

7 (3) Paragraph (2) of section 25B(g) of such 

8 Code is amended by striking ‘‘25A(i)’’ and inserting 

9 ‘‘25A’’. 

10 (4) Paragraph (2) of section 1400C(d) of such 

11 Code is amended by striking ‘‘25A(i)’’ and inserting 

12 ‘‘25A’’. 

13 (5) Section 62(a) of such Code is amended by 

14 striking paragraph (18). 

15 (6) Subparagraph (A) of section 86(b)(2) of 

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

17 (7) Subparagraph (B) of section 72(t)(7) of 

18 such Code is amended by striking ‘‘section 

19 25A(g)(2)’’ and inserting ‘‘section 25A(d)(2)’’. 

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

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

22 (9) Subparagraph (A) of section 137(b)(3) of 

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

24 (10) Subparagraph (A) of section 199(d)(2) of 

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


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1 (11) Clause (ii) of section 219(g)(3)(A) of such 

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

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

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

5 (13) Clause (iii) of section 469(i)(3)(F) of such 

6 Code is amended by striking ‘‘221, and 222’’ and in7 serting ‘‘and 221’’. 

8 (14) Subsection (d) of section 221 of such Code 

9 is amended— 

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

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

12 25A(d)(2)’’, and 

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

14 second sentence of paragraph (2) and inserting 

15 ‘‘section 25A(c)(2)’’. 

16 (15) Paragraph (3) of section 221(d) of such 

17 Code is amended to read as follows: 

18 ‘‘(3) ELIGIBLE STUDENT.—The term ‘eligible 

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

20 a student who— 

21 ‘‘(A) meets the requirements of section 

22 484(a)(1) of the Higher Education Act of 1965 

23 (20 U.S.C. 1091(a)(1)), as in effect on the date 

24 of the enactment of the Taxpayer Relief Act of 

25 1997, and 


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

2 full-time workload for the course of study the 

3 student is pursuing.’’. 

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

5 such Code, as amended by this Act, is amended by 

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

7 ‘‘25A(d)(2)’’. 

8 (17) Clause (i) of section 529(e)(3)(B) of such 

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

10 and inserting ‘‘section 221(d)(3)’’. 

11 (18) Subclause (I) of section 530(d)(2)(C)(i) of 

12 such Code is amended by striking ‘‘section 

13 25A(g)(2)’’ and inserting ‘‘section 25A(d)(2)’’. 

14 (19) Clause (iii) of section 530(d)(4)(B) of such 

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

16 and inserting ‘‘25A(d)(2)’’. 

17 (20) Section 1400O of such Code is amended 

18 by adding at the end the following flush sentence: 

19 ‘‘For purposes of this section, any reference to sec20 tion 25A shall be treated as a reference to such section 

21 as in effect on the day before the date of the enactment 

22 of this sentence.’’. 

23 (21) Subsection (e) of section 6050S of such 

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

25 inserting ‘‘subsection (d)(2)’’. 


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1 (22) Subparagraph (J) of section 6213(g)(2) of 

2 such Code is amended by striking ‘‘section 

3 25A(g)(1) (relating to higher education tuition and 

4 related expenses)’’ and inserting ‘‘section 25A(d)(1) 

5 (relating to higher education tax credit)’’. 

6 (23) Paragraph (2) of section 1324(b) of title 

7 31, United States Code, is amended by inserting ‘‘, 

8 25A,’’ after ‘‘section 35’’. 

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

10 this section shall apply to expenses paid after December 

11 31, 2010, for education furnished in academic periods be12 ginning after such date. 

Æ 


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