I 

110TH CONGRESS 

2D SESSION H. R. 5691 

To amend the Internal Revenue Code of 1986 to allow an above-the-line 

deduction for State and local real property taxes on principal residences 

of taxpayers who elect not to deduct State and local income and general 

sales taxes, a refundable credit for the increased cost in 2008 of heating 

oil used to heat the principal residence of the taxpayer, and to increase 

and make permanent the deduction for qualified tuition and related 

expenses. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 3, 2008 

Ms. SHEA-PORTER 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 allow an 

above-the-line deduction for State and local real property 

taxes on principal residences of taxpayers who elect not 

to deduct State and local income and general sales taxes, 

a refundable credit for the increased cost in 2008 of 

heating oil used to heat the principal residence of the 

taxpayer, and to increase and make permanent the deduction for qualified tuition and related expenses. 

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. SHORT TITLE. 

2 This Act may be cited as the ‘‘Middle Class Assist3 ance Act of 2008’’. 

4 SEC. 2. ABOVE-THE-LINE DEDUCTION FOR STATE AND 

5 LOCAL REAL PROPERTY TAXES ON PRIN6 CIPAL RESIDENCES OF TAXPAYERS WHO 

7 ELECT NOT TO DEDUCT STATE AND LOCAL 

8 INCOME AND GENERAL SALES TAXES. 

9 (a) IN GENERAL.—Subsection (a) of section 62 of the 

10 Internal Revenue Code of 1986 (defining adjusted gross 

11 income) is amended by inserting after paragraph (21) the 

12 following new paragraph: 

13 ‘‘(22) DEDUCTION FOR STATE AND LOCAL

14 REAL PROPERTY TAXES ON PRINCIPAL RESIDENCES

15 OF TAXPAYERS WHO DO NOT DEDUCT STATE AND

16 LOCAL INCOME AND GENERAL SALES TAXES.— 

17 ‘‘(A) IN GENERAL.—In the case of an eligi18 ble individual, the deduction allowed by section 

19 164 for State and local real property taxes to 

20 the extent such taxes are attributable to— 

21 ‘‘(i) property located in the United 

22 States, and 

23 ‘‘(ii) for a period that such individual 

24 (or such individual’s spouse) owned and 

25 used the property as their principal resi26 dence (within the meaning of section 121). 


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1 ‘‘(B) ELIGIBLE INDIVIDUAL.—For pur2 poses of subparagraph (A), the term ‘eligible in3 dividual’ means any taxpayer who elects for the 

4 taxable year to apply section 164 without re5 gard to— 

6 ‘‘(i) the reference to State and local 

7 income taxes in section 164(a), and 

8 ‘‘(ii) the election under section 

9 164(b)(5) (relating to election to deduct 

10 State and local sales taxes in lieu of State 

11 and local income taxes).’’. 

12 (b) NO AFFECT ON AMT.—Subparagraph (A) of sec13 tion 56(b)(1) of such Code is amended by adding at the 

14 end the following new sentence: ‘‘Section 62(a)(22) shall 

15 not apply for purposes of the preceding sentence.’’. 

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

17 this section shall apply to taxable years ending after the 

18 date of the enactment of this Act. 

19 SEC. 3. REFUNDABLE CREDIT FOR INCREASED 2008 HOME 

20 HEATING OIL COSTS. 

21 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

22 Internal Revenue Code of 1986 (relating to rules of special 

23 application) is amended by adding at the end the following 

24 new section: 


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1 ‘‘SEC. 6431. REFUNDABLE CREDIT FOR INCREASED 2008 

2 HOME HEATING OIL COSTS. 

3 ‘‘(a) IN GENERAL.—In the case of an eligible indi4 vidual, there shall be allowed as a credit against the tax 

5 imposed by subtitle A for the first taxable year of the tax6 payer ending on or after December 31, 2008, an amount 

7 equal to the taxpayer’s increased 2008 home heating oil 

8 costs. 

9 ‘‘(b) LIMITATIONS.— 

10 ‘‘(1) MAXIMUM CREDIT.—The credit allowed by 

11 this section for the taxable year shall not exceed 

12 $500. 

13 ‘‘(2) LIMITATION BASED ON ADJUSTED GROSS

14 INCOME.—The dollar amount applicable under para15 graph (1) (determined after the application of sub16 section (e)(2)) shall be reduced (but not below zero) 

17 by the amount which bears the same ratio to such 

18 applicable dollar amount (as so determined) as the 

19 excess of the taxpayer’s adjusted gross income over 

20 $200,000 bears to $10,000. 

21 ‘‘(c) ELIGIBLE INDIVIDUAL.— 

22 ‘‘(1) IN GENERAL.—For purposes of this sec23 tion, the term ‘eligible individual’ means any indi24 vidual whose principal residence is located in the 

25 United States. 


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1 ‘‘(2) EXCEPTION.—Such term shall not in2 clude— 

3 ‘‘(A) any nonresident alien individual, and 

4 ‘‘(B) any individual with respect to whom 

5 a deduction under section 151 is allowable to 

6 another taxpayer for a taxable year beginning 

7 in the calendar year in which the individual’s 

8 taxable year begins. 

9 ‘‘(d) INCREASED 2008 HEATING OIL COSTS.—For 

10 purposes of this section— 

11 ‘‘(1) IN GENERAL.—The term ‘increased 2008 

12 heating oil costs’ means the excess (if any) of— 

13 ‘‘(A) the amount paid by the taxpayer for 

14 heating oil used to provide space heating for the 

15 principal residence of the taxpayer during 2007, 

16 over 

17 ‘‘(B) the amount paid by the taxpayer for 

18 heating oil used to provide space heating for 

19 such residence during 2008. 

20 ‘‘(2) USE AS PRINCIPAL RESIDENCE FOR LESS

21 THAN ENTIRE YEAR.—If the principal residence of 

22 an individual is not the same throughout 2007 and 

23 2008, the limitation applicable to such individual 

24 under subsection (b) shall be the amount equal to— 


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1 ‘‘(A) such limitation (determined without 

2 regard to this paragraph), multiplied by 

3 ‘‘(B) the smaller of— 

4 ‘‘(i) the fraction of 2007 (determined 

5 on a daily basis) that such residence was 

6 the principal residence of the individual, or 

7 ‘‘(ii) the fraction of 2008 (as so deter8 mined) that such residence was the prin9 cipal residence of the individual. 

10 ‘‘(3) RENTERS.—In the case of an individual 

11 who occupies a unit in a building as a tenant, such 

12 individual shall be treated as paying the individual’s 

13 allocable share (determined as provided by the Sec14 retary) of the heating oil used to provide space heat15 ing for such building. 

16 ‘‘(4) HEATING OIL NOT USED THROUGHOUT

17 PERIOD.—If substantially all of the space heating 

18 for a residence is not provided by heating oil con19 sumed at such residence throughout 2007 and 2008, 

20 the application of this section shall be determined 

21 under regulations prescribed by the Secretary. 

22 ‘‘(e) SPECIAL RULES.— 

23 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc24 tion shall be allowed for the amount described in 

25 subsection (d)(1)(B) (otherwise allowable as a deVerDate Aug 31 2005 21:15 Apr 04, 2008 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5691.IH H5691

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1 duction for the taxable year) which is equal to the 

2 amount of the credit determined for such taxable 

3 year under this section. 

4 ‘‘(2) DOLLAR AMOUNT IN CASE OF JOINT OCCU5 PANCY.—In the case of a dwelling unit which is the 

6 principal residence by 2 or more individuals, the dol7 lar limitation under subsection (b)(1) shall be allo8 cated among such individuals in proportion to their 

9 respective payments of the 2008 heating oil costs. 

10 ‘‘(3) CERTAIN OTHER RULES TO APPLY.—Rules 

11 similar to the rules of paragraphs (5), (6), and (7) 

12 of section 25D(e) shall apply for purposes of this 

13 section. 

14 ‘‘(f) PRINCIPAL RESIDENCE.—For purposes of this 

15 section, the term ‘principal residence’ has the meaning 

16 given to such term by section 121; except that no owner17 ship requirement shall be imposed. 

18 ‘‘(g) TREATMENT AS REFUNDABLE CREDIT.—For 

19 purposes of this title, the credit allowed by this section 

20 shall be treated as a credit allowed under subpart C of 

21 part IV of subchapter A of chapter 1 (relating to refund22 able credits).’’. 

23 (b) TECHNICAL AMENDMENTS.— 


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1 (1) Paragraph (2) of section 1324(b) of title 

2 31, United States Code, is amended by inserting ‘‘or 

3 6431’’ after ‘‘section 35’’. 

4 (2) The table of sections for chapter 65 of such 

5 Code is amended by adding at the end the following 

6 new item: 

‘‘Sec. 6431. Refundable credit for increased 2008 home heating oil costs.’’. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2007. 

10 SEC. 4. DEDUCTION FOR TUITION AND RELATED EXPENSES 

11 INCREASED AND MADE PERMANENT. 

12 (a) DEDUCTION MADE PERMANENT.—Section 222 of 

13 the Internal Revenue Code of 1986 (relating to qualified 

14 tuition and related expenses) is amended by striking sub15 section (e). 

16 (b) DEDUCTION INCREASED.—Subsection (b) section 

17 222 of such Code is amended to read as follows: 

18 ‘‘(b) DOLLAR LIMITATIONS.— 

19 ‘‘(1) JOINT RETURNS.—The expenses of each 

20 student which may be taken into account under this 

21 section for any taxable year shall not exceed the ap22 plicable limit determined in accordance with the fol23 lowing table: 

The applicable 

‘‘If adjusted gross income— limit is—

Does not exceed $130,000 ................................................ $6,000


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The applicable 

‘‘If adjusted gross income— limit is—

Exceeds $130,000 but does not exceed $160,000 ............ $3,000

Exceeds $160,000 but does not exceed $200,000 ............ $1,500

Exceeds $200,000 ............................................................. 0. 

1 ‘‘(2) OTHER TAXPAYERS.—In the case of tax2 payers not filing a joint return, the table contained 

3 in paragraph (1) shall be applied by substituting 

amounts of adjusted gross income which are 1 4 ⁄2 of 

5 the amounts contained therein. 

6 ‘‘(3) ADJUSTED GROSS INCOME.—For purposes 

7 of this subsection, adjusted gross income shall be de8 termined— 

9 ‘‘(A) without regard to this section and 

10 sections 199, 911, 931, and 933, and 

11 ‘‘(B) after application of sections 86, 135, 

12 137, 219, 221, and 469.’’. 

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

14 this section shall apply to taxable years beginning after 

15 the date of the enactment of this Act. 

Æ 


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