SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Middle Class Assist-
ance Act of 2008’’. 
SEC. 2. ABOVE-THE-LINE DEDUCTION FOR STATE AND 
LOCAL REAL PROPERTY TAXES ON PRIN-
CIPAL RESIDENCES OF TAXPAYERS WHO 
ELECT NOT TO DEDUCT STATE AND LOCAL 
INCOME AND GENERAL SALES TAXES. 
(a) IN GENERAL.—Subsection (a) of section 62 of the 
Internal Revenue Code of 1986 (defining adjusted gross 
income) is amended by inserting after paragraph (21) the 
following new paragraph: 
‘‘(22) DEDUCTION
FOR
STATE
AND
LOCAL 
REAL PROPERTY TAXES ON PRINCIPAL RESIDENCES 
OF TAXPAYERS WHO DO NOT DEDUCT STATE AND 
LOCAL INCOME AND GENERAL SALES TAXES.— 
‘‘(A) IN GENERAL.—In the case of an eligi-
ble individual, the deduction allowed by section 
164 for State and local real property taxes to 
the extent such taxes are attributable to— 
‘‘(i) property located in the United 
States, and 
‘‘(ii) for a period that such individual 
(or such individual’s spouse) owned and 
used the property as their principal resi-
dence (within the meaning of section 121). 
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‘‘(B) ELIGIBLE
INDIVIDUAL.—For pur-
poses of subparagraph (A), the term ‘eligible in-
dividual’ means any taxpayer who elects for the 
taxable year to apply section 164 without re-
gard to— 
‘‘(i) the reference to State and local 
income taxes in section 164(a), and 
‘‘(ii) 
the 
election 
under 
section 
164(b)(5) (relating to election to deduct 
State and local sales taxes in lieu of State 
and local income taxes).’’. 
(b) NO AFFECT ON AMT.—Subparagraph (A) of sec-
tion 56(b)(1) of such Code is amended by adding at the 
end the following new sentence: ‘‘Section 62(a)(22) shall 
not apply for purposes of the preceding sentence.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 3. REFUNDABLE CREDIT FOR INCREASED 2008 HOME 
HEATING OIL COSTS. 
(a) IN GENERAL.—Subchapter B of chapter 65 of the 
Internal Revenue Code of 1986 (relating to rules of special 
application) is amended by adding at the end the following 
new section: 
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‘‘SEC. 6431. REFUNDABLE CREDIT FOR INCREASED 2008 
HOME HEATING OIL COSTS. 
‘‘(a) IN GENERAL.—In the case of an eligible indi-
vidual, there shall be allowed as a credit against the tax 
imposed by subtitle A for the first taxable year of the tax-
payer ending on or after December 31, 2008, an amount 
equal to the taxpayer’s increased 2008 home heating oil 
costs. 
‘‘(b) LIMITATIONS.— 
‘‘(1) MAXIMUM CREDIT.—The credit allowed by 
this section for the taxable year shall not exceed 
$500. 
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS 
INCOME.—The dollar amount applicable under para-
graph (1) (determined after the application of sub-
section (e)(2)) shall be reduced (but not below zero) 
by the amount which bears the same ratio to such 
applicable dollar amount (as so determined) as the 
excess of the taxpayer’s adjusted gross income over 
$200,000 bears to $10,000. 
‘‘(c) ELIGIBLE INDIVIDUAL.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘eligible individual’ means any indi-
vidual whose principal residence is located in the 
United States. 
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‘‘(2) EXCEPTION.—Such term shall not in-
clude— 
‘‘(A) any nonresident alien individual, and 
‘‘(B) any individual with respect to whom 
a deduction under section 151 is allowable to 
another taxpayer for a taxable year beginning 
in the calendar year in which the individual’s 
taxable year begins. 
‘‘(d) INCREASED 2008 HEATING OIL COSTS.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘increased 2008 
heating oil costs’ means the excess (if any) of— 
‘‘(A) the amount paid by the taxpayer for 
heating oil used to provide space heating for the 
principal residence of the taxpayer during 2007, 
over 
‘‘(B) the amount paid by the taxpayer for 
heating oil used to provide space heating for 
such residence during 2008. 
‘‘(2) USE AS PRINCIPAL RESIDENCE FOR LESS 
THAN ENTIRE YEAR.—If the principal residence of 
an individual is not the same throughout 2007 and 
2008, the limitation applicable to such individual 
under subsection (b) shall be the amount equal to— 
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‘‘(A) such limitation (determined without 
regard to this paragraph), multiplied by 
‘‘(B) the smaller of— 
‘‘(i) the fraction of 2007 (determined 
on a daily basis) that such residence was 
the principal residence of the individual, or 
‘‘(ii) the fraction of 2008 (as so deter-
mined) that such residence was the prin-
cipal residence of the individual. 
‘‘(3) RENTERS.—In the case of an individual 
who occupies a unit in a building as a tenant, such 
individual shall be treated as paying the individual’s 
allocable share (determined as provided by the Sec-
retary) of the heating oil used to provide space heat-
ing for such building. 
‘‘(4) HEATING
OIL
NOT
USED
THROUGHOUT 
PERIOD.—If substantially all of the space heating 
for a residence is not provided by heating oil con-
sumed at such residence throughout 2007 and 2008, 
the application of this section shall be determined 
under regulations prescribed by the Secretary. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed for the amount described in 
subsection (d)(1)(B) (otherwise allowable as a de-
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duction for the taxable year) which is equal to the 
amount of the credit determined for such taxable 
year under this section. 
‘‘(2) DOLLAR AMOUNT IN CASE OF JOINT OCCU-
PANCY.—In the case of a dwelling unit which is the 
principal residence by 2 or more individuals, the dol-
lar limitation under subsection (b)(1) shall be allo-
cated among such individuals in proportion to their 
respective payments of the 2008 heating oil costs. 
‘‘(3) CERTAIN OTHER RULES TO APPLY.—Rules 
similar to the rules of paragraphs (5), (6), and (7) 
of section 25D(e) shall apply for purposes of this 
section. 
‘‘(f) PRINCIPAL RESIDENCE.—For purposes of this 
section, the term ‘principal residence’ has the meaning 
given to such term by section 121; except that no owner-
ship requirement shall be imposed. 
‘‘(g) TREATMENT AS REFUNDABLE CREDIT.—For 
purposes of this title, the credit allowed by this section 
shall be treated as a credit allowed under subpart C of 
part IV of subchapter A of chapter 1 (relating to refund-
able credits).’’. 
(b) TECHNICAL AMENDMENTS.— 
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(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘or 
6431’’ after ‘‘section 35’’. 
(2) The table of sections for chapter 65 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 6431. Refundable credit for increased 2008 home heating oil costs.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 4. DEDUCTION FOR TUITION AND RELATED EXPENSES 
INCREASED AND MADE PERMANENT. 
(a) DEDUCTION MADE PERMANENT.—Section 222 of 
the Internal Revenue Code of 1986 (relating to qualified 
tuition and related expenses) is amended by striking sub-
section (e). 
(b) DEDUCTION INCREASED.—Subsection (b) section 
222 of such Code is amended to read as follows: 
‘‘(b) DOLLAR LIMITATIONS.— 
‘‘(1) JOINT RETURNS.—The expenses of each 
student which may be taken into account under this 
section for any taxable year shall not exceed the ap-
plicable limit determined in accordance with the fol-
lowing table: 
The applicable 
‘‘If adjusted gross income— 
limit is— 
Does not exceed $130,000 ................................................
$6,000
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The applicable 
‘‘If adjusted gross income— 
limit is— 
Exceeds $130,000 but does not exceed $160,000 ............
$3,000
Exceeds $160,000 but does not exceed $200,000 ............
$1,500
Exceeds $200,000 .............................................................
0. 
‘‘(2) OTHER TAXPAYERS.—In the case of tax-
payers not filing a joint return, the table contained 
in paragraph (1) shall be applied by substituting 
amounts of adjusted gross income which are 1⁄2 of 
the amounts contained therein. 
‘‘(3) ADJUSTED GROSS INCOME.—For purposes 
of this subsection, adjusted gross income shall be de-
termined— 
‘‘(A) without regard to this section and 
sections 199, 911, 931, and 933, and 
‘‘(B) after application of sections 86, 135, 
137, 219, 221, and 469.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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