II 

111TH CONGRESS 

1ST SESSION S. 1120 

To amend the Internal Revenue Code of 1986 to conform the definitions 

of qualifying expenses for purposes of education tax benefits. 

IN THE SENATE OF THE UNITED STATES 

MAY 21, 2009 

Mrs. LINCOLN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to conform 

the definitions of qualifying expenses for purposes of 

education tax benefits. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. HOPE AND LIFETIME LEARNING CREDIT. 

4 (a) IN GENERAL.—Section 25A of the Internal Rev5 enue Code of 1986 is amended— 

6 (1) by striking ‘‘qualified tuition and related ex7 penses’’ each place it appears in subsections (b), (c), 

8 (e), (g), and (i) and inserting ‘‘higher education ex9 penses’’, and 


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1 (2) by striking paragraph (1) of subsection (f) 

2 and inserting the following: 

3 ‘‘(1) HIGHER EDUCATION EXPENSES.—The 

4 term ‘higher education expenses’ means any expense 

5 of a type which is taken into account in determining 

6 the 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 the Taxpayer Relief Act 

9 of 1997) of— 

10 ‘‘(A) the taxpayer, 

11 ‘‘(B) the taxpayer’s spouse, or 

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

13 respect to whom the taxpayer is allowed a de14 duction under section 151, 

15 at an eligible educational institution for courses of 

16 instruction of such individual at such institution.’’. 

17 (b) CONFORMING AMENDMENTS.— 

18 (1) Section 6050S of the Internal Revenue 

19 Code of 1986 is amended by striking ‘‘qualified tui20 tion and related expenses’’ each place it appears in 

21 subsections (a)(2), (b)(2)(B)(i), and (e) and insert22 ing ‘‘higher education expenses’’. 

23 (2) Section 6213(g)(2)(J) of such Code is 

24 amended by striking ‘‘tuition and related expenses’’ 

25 and inserting ‘‘expenses’’. 


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1 (3) Section 6724 of such Code is amended by 

2 striking ‘‘qualified tuition and related expenses’’ 

3 each place it appears in subsections (d)(1)(B)(xii) 

4 and (d)(2)(BB) and inserting ‘‘higher education ex5 penses’’. 

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

7 this section shall apply to expenses paid after December 

8 31, 2008. 

9 SEC. 2. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 

10 PLANS FOR HIGHER EDUCATION EXPENSES. 

11 (a) IN GENERAL.—Subparagraph (A) of section 

12 72(t)(7) of the Internal Revenue Code of 1986 is amended 

13 by striking ‘‘means qualified higher education expenses’’ 

14 and all that follows and inserting ‘‘means higher education 

15 expenses (as defined in section 25A(f)(1)) for education 

16 furnished to—’’ 

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

18 this section shall apply to distributions after December 31, 

19 2008. 

20 SEC. 3. QUALIFIED SCHOLARSHIPS. 

21 (a) IN GENERAL.—Subsection (b) of section 117 of 

22 the Internal Revenue Code of 1986 is amended— 

23 (1) by striking ‘‘qualified tuition and related ex24 penses’’ in paragraph (1) and inserting ‘‘higher edu25 cation expenses’’, and 


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1 (2) by striking paragraph (2) and inserting the 

2 following: 

3 ‘‘(2) HIGHER EDUCATION EXPENSES.—For 

4 purposes of paragraph (1), the term ‘higher edu5 cation expenses’ means any expense of a type which 

6 is taken into account in determining the cost of at7 tendance (as defined in section 472 of the Higher 

8 Education Act of 1965, as in effect on the date of 

9 the enactment of the Taxpayer Relief Act of 1997) 

10 of a student at an eligible educational institution (as 

11 defined in section 25A(f)(2)).’’. 

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

13 this section shall apply to amounts received after Decem14 ber 31, 2008. 

15 SEC. 4. INCOME FROM US SAVINGS BONDS. 

16 (a) IN GENERAL.—Section 135(c)(2) of the Internal 

17 Revenue Code of 1986 is amended— 

18 (1) by striking subparagraphs (A) and (B) and 

19 inserting the following: 

20 ‘‘(A) QUALIFIED HIGHER EDUCATION EX21 PENSES.—The term ‘qualified higher education 

22 expenses’ means higher education expenses 

23 within the meaning of section 25A(f).’’, and 

24 (2) by redesignating subparagraph (C) as sub25 paragraph (B). 


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1 (b) CONFORMING AMENDMENTS.— 

2 (1) Subsection (c) of section 135 of the Internal 

3 Revenue Code of 1986 is amended by striking para4 graph (3) and redesignating paragraph (4) as para5 graph (3). 

6 (2) Section 135 of the Internal Revenue Code 

7 of 1986 is amended by striking ‘‘TUITION AND

8 FEES’’ in the heading and inserting ‘‘EXPENSES’’. 

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

10 this section shall apply to expenses paid after December 

11 31, 2008. 

12 SEC. 5. DEDUCTION FOR QUALIFIED TUITION AND RE13 LATED EXPENSES. 

14 (a) IN GENERAL.—Subsection (a) of section 222 of 

15 the Internal Revenue Code of 1986 is amended by striking 

16 ‘‘qualified tuition and related expenses’’ and inserting 

17 ‘‘higher education expenses’’. 

18 (b) DEFINITION.—Paragraph (1) of section 222(d) of 

19 the Internal Revenue Code of 1986 is amended to read 

20 as follows: 

21 ‘‘(1) HIGHER EDUCATION EXPENSES.—The 

22 term ‘higher education expenses’ has the meaning 

23 given such term by section 25A(f). Such expenses 

24 shall be reduced in the same manner as under sec25 tion 25A(g)(2).’’. 


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1 (c) CONFORMING AMENDMENTS.— 

2 (1) Subsections (c)(2)(B), (d)(2), (d)(3)(A), 

3 and (d)(3)(B) of section 222 of the Internal Rev4 enue Code of 1986 are each amended by striking 

5 ‘‘qualified tuition and related expenses’’ and insert6 ing ‘‘higher education expenses’’. 

7 (2) Section 222 of such Code is amended by 

8 striking ‘‘QUALIFIED TUITION AND RELATED

9 EXPENSES’’ in the heading and inserting ‘‘HIGHER

10 EDUCATION EXPENSES’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2008. 

14 SEC. 6. QUALIFIED TUITION PROGRAMS. 

15 (a) IN GENERAL.—Paragraph (3) of section 529(e) 

16 of the Internal Revenue Code of 1986 is amended to read 

17 as follows: 

18 ‘‘(3) QUALIFIED HIGHER EDUCATION EX19 PENSES.—The term ‘qualified higher education ex20 penses’ means any expense of a type which is taken 

21 into account in determining the cost of attendance 

22 (as defined in section 472 of the Higher Education 

23 Act of 1965, as in effect on the date of the enact24 ment of the Taxpayer Relief Act of 1997) of a bene25 ficiary at an eligible educational institution.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 1400O of 

2 the Internal Revenue Code of 1986 is amended by striking 

3 paragraph (1) and redesignating paragraphs (2) and (3) 

4 as paragraphs (1) and (2), respectively. 

5 (c) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2008. 

Æ 


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