mined under subsection (b), of the educational expenses
paid by him during the taxable year to one or more eligible
educational institutions for himself, his spouse, or any of
his dependents (as defined in section 152).
‘‘(b) LIMITATIONS.—
‘‘(1) AMOUNT
PER
INDIVIDUAL.—The credit
under subsection (a) for the educational expenses of
any individual paid in any taxable year shall be
equal to so much of such expenses paid with respect
to such individual as does not exceed $1,000.
‘‘(2) PRORATION
OF
CREDIT
WHERE
MORE
THAN
ONE
TAXPAYER
PAYS
EXPENSES.—If edu-
cational expenses of an individual are paid by more
than one taxpayer during any calendar year, the
credit allowable to each such taxpayer under sub-
section (a) for any taxable year beginning in such
calendar year shall be the same portion of the credit
determined under paragraph (1) for such calendar
year which the amount of educational expenses of
such individual paid by the taxpayer during such
calendar year is of the total amount of educational
expenses of such individual paid during such cal-
endar year by all such taxpayers.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) 
EDUCATIONAL
EXPENSES.—The 
term
‘educational expenses’ means amounts paid for—
‘‘(A) tuition and fees required for the en-
rollment or attendance of a student at an eligi-
ble educational institution, and
‘‘(B) fees, books, supplies, and equipment
required for courses of instruction at an eligible
educational institution.
Such term does not include any amount paid, di-
rectly or indirectly, for meals, lodging, or similar
personal, living, or family expenses. In the event an
amount paid for tuition or fees includes an amount
for meals, lodging, or similar expenses which is not
separately stated, the portion of such amount which
is attributable to meals, lodging, or similar expenses
shall be determined under regulations prescribed by
the Secretary.
‘‘(2) ELIGIBLE EDUCATIONAL INSTITUTION.—
The term ‘eligible educational institution’ means—
‘‘(A) an institution of higher education,
‘‘(B) a vocational school,
‘‘(C) a secondary school, or
‘‘(D) an elementary school.
‘‘(3) INSTITUTION OF HIGHER EDUCATION.—
The term ‘institution of higher education’ means the
institutions described in section 1201(a) or 481(a)
of the Higher Education Act of 1965.
‘‘(4) VOCATIONAL
SCHOOL.—The term ‘voca-
tional school’ means an area vocational education
school as defined in section 521(3) of the Carl D.
Perkins Vocational Education Act.
‘‘(5) 
ELEMENTARY
AND
SECONDARY
SCHOOLS.—The terms ‘elementary school’ and ‘sec-
ondary school’ mean, respectively, any elementary or
secondary school (as defined in paragraph (7) of sec-
tion 198(a) of the Elementary and Secondary Edu-
cation Act of 1965) which is privately operated but
only if it is—
‘‘(A) accredited or approved under State
law (or, in the case of school in a State which
has no procedure for the accreditation or ap-
proval of privately operated schools, which
meets the requirements of State law relating to
compulsory school attendance), and
‘‘(B) exempt from taxation under section
501(a) as an organization described in section
501(c)(3).
The terms ‘elementary school’ and ‘secondary school’
include facilities which offer education for individ-
uals who are physically or mentally handicapped as
a substitute for public elementary or secondary edu-
cation.
‘‘(d) SPECIAL RULES.—
‘‘(1) ADJUSTMENT
FOR
CERTAIN
SCHOLAR-
SHIPS
AND
VETERANS
BENEFITS.—The amounts
otherwise taken into account under subsection (a) as
educational expenses of any individual during any
period shall be reduced (before the application of
subsection (b)) by any amounts received by such in-
dividual during such period as—
‘‘(A) a qualified scholarship (within the
meaning of section 117(b)) which under section
117 is not includible in gross income, or
‘‘(B) an educational assistance allowance
under chapters 32, 34, or 35 of title 38 of the
United States Code.
‘‘(2) ELIGIBLE
COURSES.—Amounts paid for
educational expenses of any individual shall be taken
into account under subsection (a) only to the extent
such expenses—
‘‘(A) are attributable to courses of instruc-
tion offered by an elementary or secondary
school, or
‘‘(B) are attributable to courses of instruc-
tion for which credit is allowed toward a bacca-
laureate degree by an institution of higher edu-
cation or toward a certificate of required course
work at a vocational school and are not attrib-
utable to any graduate program of such individ-
ual.
‘‘(3) INDIVIDUAL
MUST
BE
AT
LEAST
HALF-
TIME STUDENT.—No credit shall be allowed under
subsection (a) for amounts paid during the taxable
year for educational expenses with respect to any in-
dividual unless that individual, during any 4 cal-
endar months during the calendar year in which the
taxable year of the taxpayer begins, is at least a
half-time student at an eligible education institution.
‘‘(4) SPOUSE.—No credit shall be allowed under
subsection (a) for amounts paid during the taxable
year for educational expenses for the spouse of the
taxpayer unless—
‘‘(A) the taxpayer is entitled to an exemp-
tion for his spouse under section 151(b) for the
taxable year, or
‘‘(B) the taxpayer files a joint return with
his spouse for the taxable year.
‘‘(e) DISALLOWANCE
OF EXPENSES
AS DEDUC-
TION.—No deduction shall be allowed under section 162
(relating to trade or business expenses) for any edu-