I

107TH CONGRESS

1ST SESSION H. R. 1072

To amend the Internal Revenue Code of 1986 to provide a credit against

income tax for higher education loan interest payments.

IN THE HOUSE OF REPRESENTATIVES

MARCH 15, 2001

Mr. FOLEY 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 provide

a credit against income tax for higher education loan

interest payments.

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 Debt Relief

5 Act’’.

6 SEC. 2. CREDIT FOR INTEREST ON HIGHER EDUCATION

7 LOANS.

8 (a) IN GENERAL.—Subpart A of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of

10 1986 (relating to nonrefundable personal credits) is
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1 amended by inserting after section 25A the following new

2 section:

3 ‘‘SEC. 25B. INTEREST ON HIGHER EDUCATION LOANS.

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in5 dividual, there shall be allowed as a credit against the tax

6 imposed by this chapter for the taxable year an amount

7 equal to the interest paid by the taxpayer during the tax8 able year on any qualified education loan.

9 ‘‘(b) MAXIMUM CREDIT.—

10 ‘‘(1) IN GENERAL.—Except as provided in para11 graph (2), the credit allowed by subsection (a) for

12 the taxable year shall not exceed $1,500.

13 ‘‘(2) LIMITATION BASED ON MODIFIED AD14 JUSTED GROSS INCOME.—

15 ‘‘(A) IN GENERAL.—If the modified ad16 justed gross income of the taxpayer for the tax17 able year exceeds $50,000 ($100,000 in the

18 case of a joint return), the amount which would

19 (but for this paragraph) be allowable as a credit

20 under this section shall be reduced (but not

21 below zero) by the amount which bears the

22 same ratio to the amount which would be so al23 lowable as such excess bears to $10,000

24 ($20,000 in the case of a joint return).
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1 ‘‘(B) MODIFIED ADJUSTED GROSS IN2 COME.—The term ‘modified adjusted gross in3 come’ means adjusted gross income determined

4 without regard to sections 911, 931, and 933.

5 ‘‘(C) INFLATION ADJUSTMENT.—In the

6 case of any taxable year beginning after 2003,

7 the $50,000 and $100,000 amounts referred to

8 in subparagraph (A) shall be increased by an

9 amount equal to—

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

11 ‘‘(ii) the cost-of-living adjustment de12 termined under section (1)(f)(3) for the

13 calendar year in which the taxable year be14 gins, by substituting ‘2002’ for ‘1992’.

15 ‘‘(D) ROUNDING.—If any amount as ad16 justed under subparagraph (C) is not a multiple

17 of $50, such amount shall be rounded to the

18 nearest multiple of $50.

19 ‘‘(c) DEPENDENTS NOT ELIGIBLE FOR CREDIT.—No

20 credit shall be allowed by this section to an individual for

21 the taxable year if a deduction under section 151 with re22 spect to such individual is allowed to another taxpayer for

23 the taxable year beginning in the calendar year in which

24 such individual’s taxable year begins.

25 ‘‘(d) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) QUALIFIED EDUCATION LOAN.—The term

2 ‘qualified education loan’ has the meaning given

3 such term by section 221(e)(1).

4 ‘‘(2) DEPENDENT.—The term ‘dependent’ has

5 the meaning given such term by section 152.

6 ‘‘(e) SPECIAL RULES.—

7 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No credit

8 shall be allowed under this section for any amount

9 taken into account for any deduction under any

10 other provision of this chapter.

11 ‘‘(2) MARRIED COUPLES MUST FILE JOINT RE12 TURN.—If the taxpayer is married at the close of

13 the taxable year, the credit shall be allowed under

14 subsection (a) only if the taxpayer and the tax15 payer’s spouse file a joint return for the taxable

16 year.

17 ‘‘(3) MARITAL STATUS.—Marital status shall be

18 determined in accordance with section 7703.’’.

19 (b) CONFORMING AMENDMENT.—The table of sec20 tions for subpart A of part IV of subchapter A of chapter

21 1 of the Internal Revenue Code of 1986 is amended by

22 inserting after the item relating to section 25A the fol23 lowing new item:

‘‘Sec. 25B. Interest on higher education loans.’’.

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

25 this section shall apply to any qualified education loan (as
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1 defined in section 25B(e)(1) of the Internal Revenue Code

2 of 1986, as added by this section) incurred on, before, or

3 after the date of the enactment of this Act, but only with

4 respect to any loan interest payment due after December

5 31, 2001.

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