II 

109TH CONGRESS 

1ST SESSION S. 575 

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

for certain education expenses. 

IN THE SENATE OF THE UNITED STATES 

MARCH 9, 2005 

Ms. MIKULSKI (for herself, Mr. LAUTENBERG, Mrs. BOXER, and Mr. LEVIN) 

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 provide 

a refundable credit for certain 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 ‘‘Educational Oppor5 tunity for All Act of 2005’’. 

6 SEC. 2. EDUCATIONAL OPPORTUNITY FOR ALL TAX CREDIT. 

7 (a) IN GENERAL.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by redesignating section 36 as section 
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1 37 and by inserting after section 35 the following new sec2 tion: 

3 ‘‘SEC. 36. EDUCATIONAL OPPORTUNITY TAX CREDIT. 

4 ‘‘(a) ALLOWANCE OF CREDIT.— 

5 ‘‘(1) IN GENERAL.—There shall be allowed as a 

6 credit against the tax imposed by this subtitle for 

7 the taxable year an amount equal to the qualified 

8 tuition expenses paid by the taxpayer during the tax9 able year (for education furnished during any aca10 demic period beginning in such taxable year). 

11 ‘‘(2) PER STUDENT LIMITATION.—The credit 

12 allowed under this section shall not exceed $4,000 

13 with respect to any individual. 

14 ‘‘(b) ELECTION NOT TO HAVE SECTION APPLY.—A 

15 taxpayer may elect not to have this section apply with re16 spect to the qualified tuition expenses of an individual for 

17 any taxable year. 

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

19 ‘‘(1) QUALIFIED TUITION EXPENSES.— 

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

21 tuition expenses’ means tuition required for the 

22 enrollment or attendance of— 

23 ‘‘(i) the taxpayer, 

24 ‘‘(ii) the taxpayer’s spouse, or 
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1 ‘‘(iii) any dependent of the taxpayer 

2 with respect to whom the taxpayer is al3 lowed a deduction under section 151, 

4 at an eligible educational institution for courses 

5 of instruction of such individual at such institu6 tion. 

7 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV8 ING SPORTS, ETC.—Such term does not include 

9 expenses with respect to any course or other 

10 education involving sports, games, or hobbies, 

11 unless such course or other education is part of 

12 the individual’s degree program. 

13 ‘‘(C) EXCEPTION FOR NONACADEMIC

14 FEES.—Such term does not include student ac15 tivity fees, athletic fees, insurance expenses, or 

16 other fees or expenses unrelated to an individ17 ual’s academic course of instruction. 

18 ‘‘(D) JOB IMPROVEMENT INCLUDED.—

19 Such term shall include tuition expenses de20 scribed in subparagraph (A) with respect to any 

21 course of instruction at an eligible educational 

22 institution to acquire or improve job skills. 

23 ‘‘(2) ELIGIBLE EDUCATIONAL INSTITUTION.—

24 The term ‘eligible educational institution’ means an 

25 institution— 
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1 ‘‘(A) which is described in section 481 of 

2 the Higher Education Act of 1965 (20 U.S.C. 

3 1088), as in effect on the date of the enactment 

4 of the Taxpayer Relief Act of 1997, and 

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

6 program under title IV of such Act. 

7 ‘‘(d) SPECIAL RULES.— 

8 ‘‘(1) IDENTIFICATION REQUIREMENT.—No 

9 credit shall be allowed under subsection (a) to a tax10 payer with respect to the qualified tuition expenses 

11 of an individual unless the taxpayer includes the 

12 name and taxpayer identification number of such in13 dividual on the return of tax for the taxable year. 

14 ‘‘(2) ADJUSTMENT FOR CERTAIN SCHOLAR15 SHIPS, ETC.—The amount of qualified tuition ex16 penses otherwise taken into account under sub17 section (a) with respect to an individual for an aca18 demic period shall be reduced by the sum of any 

19 amounts paid for the benefit of such individual 

20 which are allocable to such period as— 

21 ‘‘(A) a qualified scholarship which is ex22 cludable from gross income under section 117, 

23 ‘‘(B) an educational assistance allowance 

24 under chapter 30, 31, 32, 34, or 35 of title 38, 
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1 United States Code, or under chapter 1606 of 

2 title 10, United States Code, and 

3 ‘‘(C) a payment (other than a gift, be4 quest, devise, or inheritance within the meaning 

5 of section 102(a)) for such individual‘s edu6 cational expenses, or attributable to such indi7 vidual’s enrollment at an eligible educational in8 stitution, which is excludable from gross income 

9 under any law of the United States. 

10 ‘‘(3) TREATMENT OF EXPENSES PAID BY DE11 PENDENT.—If a deduction under section 151 with 

12 respect to an individual is allowed to another tax13 payer for a taxable year beginning in the calendar 

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

15 ‘‘(A) no credit shall be allowed under sub16 section (a) to such individual for such individ17 ual’s taxable year, and 

18 ‘‘(B) qualified tuition expenses paid by 

19 such individual during such individual’s taxable 

20 year shall be treated for purposes of this section 

21 as paid by such other taxpayer. 

22 ‘‘(4) TREATMENT OF CERTAIN PREPAY23 MENTS.—If qualified tuition expenses are paid by 

24 the taxpayer during a taxable year for an academic 

25 period which begins during the first 3 months fol-
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1 lowing such taxable year, such academic period shall 

2 be treated for purposes of this section as beginning 

3 during such taxable year. 

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

5 shall be allowed under this section for any expense 

6 for which a deduction is allowed under any other 

7 provision of this chapter. 

8 ‘‘(6) COORDINATION WITH HOPE SCHOLARSHIP

9 AND LIFETIME LEARNING CREDITS.—The qualified 

10 tuition and related expenses with respect to an indi11 vidual for whom a Hope Scholarship Credit or the 

12 Lifetime Learning Credit under section 25A is al13 lowed for the taxable year shall not be taken into ac14 count under this section. 

15 ‘‘(7) NO CREDIT FOR MARRIED INDIVIDUALS

16 FILING SEPARATE RETURNS.—If the taxpayer is a 

17 married individual (within the meaning of section 

18 7703), this section shall apply only if the taxpayer 

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

20 taxable year. 

21 ‘‘(8) NONRESIDENT ALIENS.—If the taxpayer is 

22 a nonresident alien individual for any portion of the 

23 taxable year, this section shall apply only if such in24 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) REGULATIONS.—The Secretary may prescribe 

4 such regulations as may be necessary or appropriate to 

5 carry out this section, including regulations providing for 

6 a recapture of the credit allowed under this section in 

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

8 of any amount which was taken into account in deter9 mining the amount of such credit.’’. 

10 (b) REFUNDABILITY OF CREDIT.—Paragraph (2) of 

11 section 1324(b) of title 31, United States Code, is amend12 ed by inserting before the period ‘‘or enacted by the Edu13 cational Opportunity for All Act of 2005’’. 

14 (c) CONFORMING AMENDMENTS.— 

15 (1) Sections 135(d)(2)(A), 222(c)(2)(A), 

16 529(c)(3)(B)(v)(II), and 530(d)(2)(C)(i)(II) of the 

17 Internal Revenue Code of 1986 are each amended by 

18 inserting ‘‘or section 36’’ after ‘‘section 25A’’ each 

19 place it appears. 

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

21 amended by inserting ‘‘or section 36(d)(1)’’ after 

22 ‘‘expenses)’’. 

23 (3) The table of sections for subpart C of part 

24 IV of subchapter A of chapter 1 of such Code is 
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1 amended by striking the item relating to section 36 

2 and inserting the following:

‘‘Sec. 36. Educational opportunity tax credit. 

‘‘Sec. 37. Overpayments of tax.’’.

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

4 this section shall apply to expenses paid after December 

5 31, 2004, for education furnished in academic periods be6 ginning after such date.

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