I 

108TH CONGRESS 

1ST SESSION H. R. 499

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

against income tax for tuition expenses incurred for each qualifying 

child of the taxpayer in attending public or private elementary or secondary school. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 29, 2003

Mr. SMITH of New Jersey 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 a 

refundable credit against income tax for tuition expenses 

incurred for each qualifying child of the taxpayer in 

attending public or private elementary or secondary 

school.

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 ‘‘Education, Achieve5 ment, and Opportunity Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 
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1 (1) Private schools supplement the public school 

2 system and are a vital component of our nation’s 

3 school network. 

4 (2) The public school system was created to 

5 serve students, not the other way around. Children 

6 should have the opportunity to attend the school sys7 tem that is most conducive to developing their abili8 ties, and parents have the right to choose the public 

9 or private school that best meets their child’s indi10 vidual needs. 

11 (3) In 1999, 4,599,000 students were enrolled 

12 in private school in grades kindergarten through 8th 

13 grade, while 1,399,000 students were enrolled in pri14 vate school in grades 9 through 12, for a combined 

15 total of 5,939,000 children enrolled in private school. 

16 (4) In 1999, 33,437,000 students were enrolled 

17 in public school in grades kindergarten through 8th 

18 grade, while 13,375,000 students were enrolled in 

19 public school in grades 9 through 12, for a combined 

20 total of 52,750,000 children enrolled in public 

21 school. 

22 (5) When polled by the Department of Edu23 cation in 1999, 78 percent of parents with children 

24 enrolled in private schools, but just 48 percent of 

25 parents with children enrolled in public schools, were 
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1 very satisfied with the school’s discipline provisions, 

2 academic standards, and quality and performance of 

3 teachers. 

4 (6) In the 1993–94 school year, the average 

5 class size in public schools was at least twice the av6 erage class size in private schools. Larger classes 

7 can result in more disruption by misbehaving stu8 dents. Thus, class size has a direct effect on the 

9 quality of the educational experience of students, 

10 teachers, and other staff, as well as parents’ satis11 faction with their child’s school. 

12 SEC. 3. CREDIT FOR ELEMENTARY AND SECONDARY EDU13 CATION EXPENSES. 

14 (a) IN GENERAL.—Subpart C of part IV of sub15 chapter A of chapter 1 of the Internal Revenue Code of 

16 1986 (relating to refundable credits) is amended by redes17 ignating section 36 as section 37 and by inserting after 

18 section 34 the following new section: 

19 ‘‘SEC. 36. ELEMENTARY AND SECONDARY EDUCATION EX20 PENSES. 

21 ‘‘(a) ALLOWANCE OF CREDIT.—

22 ‘‘(1) IN GENERAL.—In the case of an indi23 vidual, there shall be allowed as a credit against the 

24 tax imposed by this subtitle for the taxable year the 

25 amount of the qualified education expenses paid by 
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1 the taxpayer during the taxable year for each quali2 fying child of the taxpayer. 

3 ‘‘(2) AMOUNT PER CHILD.—The amount of 

4 credit allowable under paragraph (1) for any taxable 

5 year with respect to the qualified education expenses 

6 of each qualifying child of the taxpayer shall not ex7 ceed—

8 ‘‘(A) $2,500 for a child enrolled in an ele9 mentary school for any portion of the taxable 

10 year, and 

11 ‘‘(B) $3,500 for a child enrolled in a sec12 ondary school for any portion of the taxable 

13 year. 

14 In any taxable year in which a child meets the re15 quirements of both subparagraphs (A) and (B), the 

16 amount of credit allowable shall not exceed the sum 

17 of the amounts in such subparagraphs. 

18 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN19 COME.—

20 ‘‘(1) IN GENERAL.—The amount of the credit 

21 allowable under subsection (a) (after the application 

22 of subsection (a)(2)) shall be reduced (but not below 

23 zero) by $50 for each $1,000 (or fraction thereof) by

24 which the taxpayer’s modified adjusted gross income 

25 exceeds the threshold amount. 
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1 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—For 

2 purposes of this paragraph (1)—

3 ‘‘(A) THRESHOLD AMOUNT.—The term 

4 ‘threshold amount’ means—

5 ‘‘(i) $150,000 in the case of a joint 

6 return, and 

7 ‘‘(ii) $75,000 in any other case. 

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

11 by any amount excluded from gross income 

12 under section 911, 931, or 933. 

13 ‘‘(C) MARITAL STATUS.—Marital status 

14 shall be determined under section 7703. 

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

16 ‘‘(1) QUALIFYING CHILD.—The term ‘qualifying 

17 child’ has the meaning provided by section 24(c). 

18 ‘‘(2) QUALIFIED EDUCATION EXPENSES.—

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

20 education expenses’ means amounts paid for—

21 ‘‘(i) tuition and fees required for the 

22 enrollment or attendance of a student at a 

23 qualified educational institution, 

24 ‘‘(ii) computers, educational software, 

25 computer support services, and books re-
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1 quired for courses of instruction at a quali2 fied educational institution, 

3 ‘‘(iii) academic tutoring (by a person 

4 other than the taxpayer), 

5 ‘‘(iv) special needs services for quali6 fying children with disabilities (within the 

7 meaning of the Americans With Disabil8 ities Act of 1990), 

9 ‘‘(v) fees for transportation services to 

10 and from a private school, if the transpor11 tation is provided by the school and the 

12 school charges a fee for the transportation, 

13 and 

14 ‘‘(vi) academic testing services. 

15 ‘‘(B) AMOUNTS EXCLUDED.—The term 

16 does not include special school fees for nonaca17 demic purposes, including fees for student ac18 tivities, athletics, insurance, school uniforms, 

19 and nonacademic after-school activities. 

20 ‘‘(3) QUALIFIED EDUCATIONAL INSTITUTION.—

21 The term ‘qualified educational institution’ means—

22 ‘‘(A) an elementary or secondary school (as 

23 defined in section 14101 of the Elementary and 

24 Secondary Education Act of 1965 (20 U.S.C. 

25 8801)), or 
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1 ‘‘(B) any private, parochial, or religious 

2 school organized for the purpose of providing el3 ementary or secondary education, or both. 

4 ‘‘(d) ADJUSTMENT FOR COVERDELL SAVINGS AC5 COUNT DISTRIBUTIONS.—The amount of qualified edu6 cation expenses taken into account under subsection (a) 

7 with respect to an individual for a taxable year shall be 

8 reduced (before the application of subsection (b)) by the 

9 sum of any amounts not includible in gross income under 

10 section 530(d)(2)(B) for such taxable year by reason of 

11 the qualified elementary and secondary education expenses 

12 (as defined in section 530(b)(4)) of such individual for 

13 such taxable year.’’ 

14 (b) TECHNICAL AMENDMENTS.—

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

16 31, United States Code, is amended by striking ‘‘or’’ 

17 after ‘‘1978,’’ and by inserting before the period ‘‘, 

18 or enacted by the Education, Achievement, and Op19 portunity Act’’. 

20 (2) The table of sections for subpart C of part 

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

22 amended by striking the last item and inserting the 

23 following new items:

‘‘Sec. 36. Elementary and secondary education expenses. 

‘‘Sec. 37. Overpayments of tax.’’
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act.

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