II 

110TH CONGRESS 

1ST SESSION S. 614 

To amend the Internal Revenue Code to double the child tax credit for 

the first year, to expand the credit dependent care services, to provide 

relief from the alternative minimum tax, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 15, 2007 

Mr. SCHUMER (for himself, Mr. BROWN, Mr. CASEY, Ms. KLOBUCHAR, Mrs. 

MCCASKILL, Mr. TESTER, Mr. WHITEHOUSE, Mrs. BOXER, and Mr. 

NELSON of Nebraska) introduced the following bill; which was read twice 

and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code to double the child 

tax credit for the first year, to expand the credit dependent care services, to provide relief from the alternative 

minimum tax, 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 ‘‘Middle Class Oppor5 tunity Act of 2007’’. 


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1 SEC. 2. INCREASED CHILD TAX CREDIT FOR FIRST YEAR 

2 CHILD IS CLAIMED AS A QUALIFYING CHILD. 

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

4 Internal Revenue Code of 1986 (relating to child tax cred5 it) is amended by striking ‘‘with respect to each qualifying 

6 child of the taxpayer an amount equal to $1,000.’’ and 

7 inserting ‘‘with respect to each individual who is a quali8 fying child of the taxpayer an amount equal to— 

9 ‘‘(1) $2,000, for the first taxable year in which 

10 such individual is a qualifying child, and 

11 ‘‘(2) $1,000, for any other taxable year in 

12 which such individual is a qualifying child.’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2006. 

16 SEC. 3. EXPANSION OF DEPENDENT CARE CREDIT. 

17 (a) INCREASED PHASEOUT THRESHOLD.—Para18 graph (2) of section 21(a) of the Internal Revenue Code 

19 of 1986 (defining applicable percentage) is amended by 

20 striking ‘‘$15,000’’ and inserting ‘‘$75,000’’. 

21 (b) CREDIT ALLOWED FOR COSTS INCURRED TO

22 CARE FOR PARENTS AND GRANDPARENTS WHO DO NOT

23 LIVE WITH THE TAXPAYER.— 

24 (1) IN GENERAL.—Paragraph (1) of section 

25 21(b) of the Internal Revenue Code of 1986 (relat26 ing to qualifying individual) is amended by striking 


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1 ‘‘or’’ at the end of subparagraph (B), by striking the 

2 period at the end of subparagraph (C) and inserting 

3 ‘‘, or’’, and by adding at the end the following new 

4 subparagraph: 

5 ‘‘(D) a dependent of the taxpayer (as de6 fined in section 152, determined without regard 

7 to subsections (b)(1), (b)(2), and (d)(1)(B)) 

8 who is the father or mother of the taxpayer (or 

9 an ancestor of such father or mother) and who 

10 is physically or mentally incapable of caring for 

11 himself or herself.’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 21(b)(1)(B) of such Code is amended by inserting 

14 ‘‘(other than a dependent described in subparagraph 

15 (D))’’ after ‘‘and (d)(1)(B))’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2006. 

19 SEC. 4. ALTERNATIVE MINIMUM TAX RELIEF. 

20 (a) INCREASE IN ALTERNATIVE MINIMUM TAX EX21 EMPTION AMOUNT FOR 2007 AND 2008.— 

22 (1) IN GENERAL.—Section 55(d)(1) of the In23 ternal Revenue Code of 1986 is amended— 

24 (A) by striking ‘‘$62,550’’ and all that fol25 lows through ‘‘2006’’ in subparagraph (A) and 


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1 inserting ‘‘the joint return amount in the case 

2 of taxable years beginning in 2006, 2007, and 

3 2008’’, and 

4 (B) by striking ‘‘$42,500’’ and all that fol5 lows through ‘‘2006’’ in subparagraph (B) and 

6 inserting ‘‘the unmarried individual return 

7 amount in the case of taxable years beginning 

8 in 2006, 2007, and 2008’’. 

9 (2) JOINT RETURN AMOUNT; UNMARRIED INDI10 VIDUAL RETURN AMOUNT.—Section 55(d) of such 

11 Code is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(4) JOINT RETURN AMOUNT; UNMARRIED IN14 DIVIDUAL RETURN AMOUNT.— 

15 ‘‘(A) JOINT RETURN AMOUNT.—For pur16 poses of paragraph (1)(A), the joint return 

17 amount shall be determined as follows: 

The joint return 

‘‘For taxable years beginning in— amount is— 

2006 ......................................................................................... $62,550

2007 ......................................................................................... $65,350

2008 ......................................................................................... $68,200. 

18 ‘‘(B) UNMARRIED INDIVIDUAL RETURN

19 AMOUNT.—For purposes of paragraph (1)(B), 

20 the unmarried individual return amount shall 

21 be determined as follows: 

The unmarried individual 

‘‘For taxable years beginning in— return amount is— 

2006 ......................................................................................... $42,500


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The unmarried individual 

‘‘For taxable years beginning in— return amount is—

2007 ......................................................................................... $43,900

2008 ......................................................................................... $45,300.’’. 

1 (b) ALLOWANCE OF NONREFUNDABLE PERSONAL

2 CREDITS AGAINST REGULAR AND ALTERNATIVE MIN3 IMUM TAX LIABILITY.—Paragraph (2) of section 26(a) of 

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘2006’’ in the heading thereof 

6 and inserting ‘‘2008’’, and 

7 (2) by striking ‘‘or 2006’’ and inserting ‘‘2006, 

8 2007, or 2008’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2006. 

12 SEC. 5. CONSOLIDATION OF EDUCATION TAX INCENTIVES 

13 INTO THE EDUCATION TAX CREDIT. 

14 (a) IN GENERAL.—Section 25A of the Internal Rev15 enue Code of 1986 (relating to Hope and Lifetime Learn16 ing credits) is amended to read as follows: 

17 ‘‘SEC. 25A. EDUCATION TAX CREDIT. 

18 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 

19 eligible student for whom an election is in effect under 

20 this section for any taxable year, there shall be allowed 

21 as a credit against the tax imposed by this chapter for 

22 the taxable year in 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 $1,000, 

7 ‘‘(2) 50 percent of so much of such expenses as 

8 exceeds $1,000 but does not exceed $3,000, and 

9 ‘‘(3) 20 percent of so much of such expenses as 

10 exceeds $3,000 but does not exceed $5,500. 

11 ‘‘(b) LIMITATIONS.— 

12 ‘‘(1) LIMITATION BASED ON MODIFIED AD13 JUSTED GROSS INCOME.— 

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

15 would (but for this paragraph) be taken into ac16 count under subsection (a) for the taxable year 

17 shall be reduced (but not below zero) by the 

18 amount determined under subparagraph (B). 

19 ‘‘(B) AMOUNT OF REDUCTION.—The 

20 amount determined under this subparagraph is 

21 the amount which bears the same ratio to the 

22 amount which would be so taken into account 

23 as— 

24 ‘‘(i) the excess of— 


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1 ‘‘(I) the taxpayer’s modified ad2 justed gross income for such taxable 

3 year, over 

4 ‘‘(II) $70,000 ($140,000 in the 

5 case of a joint return), bears to 

6 ‘‘(ii) $20,000 ($40,000 in the case of 

7 a joint return). 

8 ‘‘(C) MODIFIED ADJUSTED GROSS IN9 COME.—The term ‘modified adjusted gross in10 come’ means the adjusted gross income of the 

11 taxpayer for the taxable year increased by any 

12 amount excluded from gross income under sec13 tion 911, 931, or 933. 

14 ‘‘(2) LIMITATION BASED ON AMOUNT OF

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

16 26(a)(2) does not apply, the credit allowed under 

17 subsection (a) for any taxable year shall not exceed 

18 the excess of — 

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

20 (as defined in section 26(b)) plus the tax im21 posed by section 55, over 

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

23 under this subpart (other than this section and 

24 sections 23, 24, and 25B) and section 27 for 

25 the taxable year. 


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1 ‘‘(3) CREDIT ALLOWED ONLY FOR 3 ELIGIBLE

2 STUDENTS.—The credit under subsection (a) to any 

3 taxpayer shall not be allowed with respect to more 

4 than 3 eligible students for any taxable year. 

5 ‘‘(4) OTHER LIMITATIONS.— 

6 ‘‘(A) CREDIT ALLOWED ONLY FOR 4 TAX7 ABLE YEARS.—An election to have this section 

8 apply with respect to any eligible student may 

9 not be made for any taxable year if such an 

10 election (by the taxpayer or any other indi11 vidual) is in effect with respect to such student 

12 for any 4 prior taxable years. 

13 ‘‘(B) CREDIT ALLOWED FOR YEAR ONLY IF

14 INDIVIDUAL IS AT LEAST 1/2 TIME STUDENT

15 FOR PORTION OF YEAR.—The credit under sub16 section (a) shall not be allowed for a taxable 

17 year with respect to the qualified tuition and re18 lated expenses of an individual unless such indi19 vidual is an eligible student for at least one aca20 demic period which begins during such year. 

21 ‘‘(C) DENIAL OF CREDIT IF STUDENT CON22 VICTED OF A FELONY DRUG OFFENSE.—The 

23 credit under subsection (a) shall not be allowed 

24 for qualified tuition and related expenses for 

25 the enrollment or attendance of a student for 


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1 any academic period if such student has been 

2 convicted of a Federal or State felony offense 

3 consisting of the possession or distribution of a 

4 controlled substance before the end of the tax5 able year with or within which such period 

6 ends. 

7 ‘‘(c) DEFINITIONS.—For purposes of this sub8 section— 

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

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

11 a student who— 

12 ‘‘(A) meets the requirements of section 

13 484(a)(1) of the Higher Education Act of 1965 

14 (20 U.S.C. 1091(a)(1)), as in effect on the date 

15 of the enactment of the Taxpayer Relief Act of 

16 1997, and 

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

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

19 student is pursuing. 

20 ‘‘(2) QUALIFIED TUITION AND RELATED EX21 PENSES.— 

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

23 tuition and related expenses’ means tuition and 

24 fees required for the enrollment or attendance 

25 of an eligible student who is— 


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1 ‘‘(i) the taxpayer, 

2 ‘‘(ii) the taxpayer’s spouse, or 

3 ‘‘(iii) any dependent of the taxpayer 

4 with respect to whom the taxpayer is al5 lowed a deduction under section 151, 

6 at an eligible educational institution for courses 

7 of instruction of such individual at such institu8 tion. 

9 ‘‘(B) INCLUSION OF CERTAIN EXPENSES

10 FOR BOOKS.— 

11 ‘‘(i) IN GENERAL.—For purposes of 

12 subparagraph (A), tuition and fees shall 

13 include 50 percent of amounts paid or in14 curred for books. 

15 ‘‘(ii) LIMITATION.—The amount of 

16 tuition and fees taken into account under 

17 subparagraph (A) by reason of clause (i) 

18 for any taxable year shall not exceed $250 

19 with respect to any eligible student. 

20 ‘‘(C) 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 ‘‘(D) 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 the date of the enactment 

12 of the Taxpayer Relief Act of 1997, and 

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

14 program under title IV of the Higher Education 

15 Act of 1965. 

16 ‘‘(d) ELECTION NOT TO HAVE SECTION APPLY.— 

17 A taxpayer may elect not to have this section apply with 

18 respect to the qualified tuition and related expenses of an 

19 individual for any taxable year. 

20 ‘‘(e) SPECIAL RULES.— 

21 ‘‘(1) IDENTIFICATION REQUIREMENT.—No 

22 credit shall be allowed under subsection (a) to a tax23 payer with respect to the qualified tuition and re24 lated expenses of an individual unless the taxpayer 

25 includes the name and taxpayer identification numVerDate Aug 31 2005 20:48 Feb 21, 2007 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S614.IS S614

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1 ber of such individual on the return of tax for the 

2 taxable year. 

3 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLAR4 SHIPS, ETC.—The amount of qualified tuition and 

5 related expenses otherwise taken into account under 

6 subsection (a) with respect to an individual for an 

7 academic period shall be reduced (before the applica8 tion of subsections (a), (b), and (c)) by the sum of 

9 any amounts paid for the benefit of such individual 

10 which are allocable to such period as— 

11 ‘‘(A) a qualified scholarship which is ex12 cludable from gross income under section 117, 

13 ‘‘(B) an educational assistance allowance 

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

15 United States Code, or under chapter 1606 of 

16 title 10, United States Code, and 

17 ‘‘(C) a payment (other than a gift, be18 quest, devise, or inheritance within the meaning 

19 of section 102(a)) for such individual‘s edu20 cational expenses, or attributable to such indi21 vidual’s enrollment at an eligible educational in22 stitution, which is excludable from gross income 

23 under any law of the United States. 

24 ‘‘(3) TREATMENT OF EXPENSES PAID BY DE25 PENDENT.—If a deduction under section 151 with 


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1 respect to an individual is allowed to another tax2 payer for a taxable year beginning in the calendar 

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

4 ‘‘(A) no credit shall be allowed under sub5 section (a) to such individual for such individ6 ual’s taxable year, and 

7 ‘‘(B) qualified tuition and related expenses 

8 paid by such individual during such individual’s 

9 taxable year shall be treated for purposes of 

10 this section as paid by such other taxpayer. 

11 ‘‘(4) TREATMENT OF CERTAIN PREPAY12 MENTS.—If qualified tuition and related expenses 

13 are paid by the taxpayer during a taxable year for 

14 an academic period which begins during the first 3 

15 months following such taxable year, such academic 

16 period shall be treated for purposes of this section 

17 as beginning during such taxable year. 

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

19 shall be allowed under this section for any expense 

20 for which a deduction is allowed under any other 

21 provision of this chapter. 

22 ‘‘(6) NO CREDIT FOR MARRIED INDIVIDUALS

23 FILING SEPARATE RETURNS.—If the taxpayer is a 

24 married individual (within the meaning of section 

25 7703), this section shall apply only if the taxpayer 


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

2 taxable year. 

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

4 a nonresident alien individual for any portion of the 

5 taxable year, this section shall apply only if such in6 dividual is treated as a resident alien of the United 

7 States for purposes of this chapter by reason of an 

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

9 ‘‘(f) INFLATION ADJUSTMENTS.— 

10 ‘‘(1) DOLLAR LIMITATION ON AMOUNT OF

11 CREDIT.— 

12 ‘‘(A) IN GENERAL.—In the case of a tax13 able year beginning after 2008, each of the dol14 lar amounts under subsection (a) shall be in15 creased by an amount equal to— 

16 ‘‘(i) such dollar amount, multiplied by 

17 ‘‘(ii) the cost-of-living adjustment de18 termined under section 1(f)(3) for the cal19 endar year in which the taxable year be20 gins, determined by substituting ‘calendar 

21 year 2007’ for ‘calendar year 1992’ in sub22 paragraph (B) thereof. 

23 ‘‘(B) ROUNDING.—If any amount as ad24 justed under subparagraph (A) is not a multiple 


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1 of $100, such amount shall be rounded to the 

2 next lowest multiple of $100. 

3 ‘‘(2) INCOME LIMITS.— 

4 ‘‘(A) IN GENERAL.—In the case of a tax5 able year beginning after 2008, the $70,000 

6 and $140,000 amounts in subsection (b)(1)(B) 

7 shall each be increased by an amount equal 

8 to— 

9 ‘‘(i) such dollar amount, multiplied by 

10 ‘‘(ii) the cost-of-living adjustment de11 termined under section 1(f)(3) for the cal12 endar year in which the taxable year be13 gins, determined by substituting ‘calendar 

14 year 2007’ for ‘calendar year 1992’ in sub15 paragraph (B) thereof. 

16 ‘‘(B) ROUNDING.—If any amount as ad17 justed under subparagraph (A) is not a multiple 

18 of $1,000, such amount shall be rounded to the 

19 next lowest multiple of $1,000. 

20 ‘‘(g) REGULATIONS.—The Secretary may prescribe 

21 such regulations as may be necessary or appropriate to 

22 carry out this section, including regulations providing for 

23 a recapture of the credit allowed under this section in 

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


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1 of any amount which was taken into account in deter2 mining the amount of such credit.’’. 

3 (b) REPEAL OF DEDUCTION FOR QUALIFIED TUI4 TION AND RELATED EXPENSES.— 

5 (1) IN GENERAL.—Part VII of subchapter B of 

6 chapter 1 of the Internal Revenue Code of 1986 is 

7 amended by striking section 222 (relating to quali8 fied tuition and related expenses). 

9 (2) CLERICAL AMENDMENT.—The table of sec10 tion for part VII of subchapter B of chapter 1 of 

11 such Code is amended by striking the item relating 

12 to section 222. 

13 (c) CONFORMING AMENDMENTS.— 

14 (1) Paragraph (1) of section 26(a) of the Inter15 nal Revenue Code of 1986 is amended by inserting 

16 ‘‘25A,’’ after ‘‘24,’’. 

17 (2) Section 62(a) of such Code is amended by 

18 striking paragraph (18). 

19 (3) Subparagraph (B) of section 72(t)(7) of 

20 such Code is amended by striking ‘‘section 

21 25A(g)(2)’’ and inserting ‘‘section 25A(e)(2)’’. 

22 (4) Section 221(d) of such Code is amended— 

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

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

25 25A(e)(2)’’, 


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

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

3 25A(c)(3)’’, and 

4 (C) by striking ‘‘section 25A(b)(3)’’ in 

5 paragraph (3) and inserting ‘‘section 

6 25A(c)(1)’’. 

7 (5) Section 529 of such Code is amended— 

8 (A) by striking ‘‘section 25A(g)(2)’’ in sub9 clause (I) of subsection (c)(3)(B)(v) and insert10 ing ‘‘section 25(e)(2)’’, 

11 (B) by striking ‘‘section 25A(b)(3)’’ in 

12 clause (i) of subsection (e)(3)(B) and inserting 

13 ‘‘section 25A(c)(1)’’. 

14 (6) Section 530 of such Code is amended— 

15 (A) by striking ‘‘section 25A(g)(2)’’ in sub16 clause (I) of subsection (d)(2)(C)(i) and insert17 ing ‘‘section 25A(e)(2)’’, 

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

19 clause (iii) of subsection (d)(4)(B) and inserting 

20 ‘‘section 25A(e)(2)’’. 

21 (7) Section 1400O of such Code is amended by 

22 adding at the end the following flush sentence: 

23 ‘‘For purposes of this section, any reference to section 25A 

24 shall be treated as a reference to such section before the 

25 date of the enactment of this sentence.’’. 


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1 (8) Subsection (e) of section 6050S of such 

2 Code is amended by striking ‘‘(without regard to 

3 subsection (g)(2) thereof)’’ and inserting ‘‘(without 

4 regard to subsection (e)(2) thereof)’’. 

5 (9) Subparagraph (J) of section 6213(g)(2) of 

6 such Code is amended by striking ‘‘section 

7 25A(g)(1)’’ and inserting ‘‘section 25A(e)(1)’’. 

8 (10) The table of sections for subpart A of part 

9 IV of subchapter A of chapter 1 of such Code is 

10 amended by striking the item relating to section 25A 

11 and inserting the following: 

‘‘Sec. 25A. Education tax credit.’’. 

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

13 this section shall apply to expenses paid after December 

14 31, 2007 (in taxable years ending after such date), for 

15 education furnished in academic periods beginning after 

16 such date. 

Æ 


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