I 
118TH CONGRESS 
1ST SESSION H. R. 3000 
To amend the Internal Revenue Code of 1986 to expand the exclusion of 
Pell Grants from gross income, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 28, 2023 
Mr. DOGGETT (for himself, Mr. KELLY of Pennsylvania, Mr. DAVIS of Illinois, 
Mr. SMITH of Nebraska, Mr. BLUMENAUER, Mr. FITZPATRICK, Mr. CAS-
TRO of Texas, and Mr. TONY GONZALES of Texas) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to expand 
the exclusion of Pell Grants from gross income, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tax-Free Pell Grant 
Act’’. 
SEC. 2. EXPANSION OF PELL GRANT EXCLUSION FROM 
GROSS INCOME. 
(a) IN GENERAL.—Paragraph section 117(b)(1) of 
the Internal Revenue Code of 1986 is amended by striking 
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‘‘received by an individual’’ and all that follows and insert-
ing ‘‘received by an individual— 
‘‘(A) as a scholarship or fellowship grant 
to the extent the individual establishes that, in 
accordance with the conditions of the grant, 
such amount was used for qualified tuition and 
related expenses, or 
‘‘(B) as a Federal Pell Grant under section 
401 of the Higher Education Act of 1965 (as 
in effect on the date of the enactment of the 
Tax-Free Pell Grant Act).’’. 
(b) NO ADJUSTMENT UNDER AMERICAN OPPOR-
TUNITY
AND LIFETIME LEARNING CREDITS.—Section 
25A(g)(2)(A) of such Code is amended by striking ‘‘a 
qualified scholarship which’’ and inserting ‘‘a qualified 
scholarship which is described in section 117(b)(1)(A) and 
which’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2022. 
SEC. 3. EXPANSION OF AMERICAN OPPORTUNITY AND 
LIFETIME LEARNING CREDITS. 
(a) IN GENERAL.—Section 25A of the Internal Rev-
enue Code of 1986 is amended— 
(1) in subsection (f)(1)— 
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(A) in subparagraph (A), by striking ‘‘tui-
tion and fees’’ inserting ‘‘tuition, fees, computer 
or peripheral equipment, child and dependent 
care expenses, and course materials’’, 
(B) by striking subparagraph (D), and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(D) CHILD AND DEPENDENT CARE EX-
PENSES.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The term ‘child 
and dependent care expenses’ means 
amounts paid for the following expenses, 
but only if such expenses are incurred to 
enable the taxpayer to be enrolled in an el-
igible educational institution for any period 
for which there are 1 or more qualifying 
individuals with respect to the taxpayer: 
‘‘(I) expenses for household serv-
ices, and 
‘‘(II) expenses for the care of a 
qualifying individual. 
Such term shall not include any amount 
paid for services outside the taxpayer’s 
household at a camp where the qualifying 
individual stays overnight. 
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‘‘(ii) QUALIFYING
INDIVIDUAL.—The 
term ‘qualifying individual’ has the mean-
ing given such term in section 21(b)(1). 
‘‘(iii) EXCEPTION, DEPENDENT CARE 
CENTERS.—Rules similar to the rules of 
subparagraphs (B), (C), and (D) of section 
21(b)(2) shall apply, except the term ‘child 
and dependent care expenses’ shall be sub-
stituted for the term ‘employment-related 
expenses’ each place it appears in such 
subparagraphs. 
‘‘(E) CHILD AND DEPENDENT CARE EX-
PENSES
ONLY
QUALIFIED
EXPENSES
WHEN 
CLAIMED
BY
ELIGIBLE
STUDENT.—Amounts 
paid for an expense described in subparagraph 
(E) may not be taken into account under this 
paragraph for a taxable year unless required for 
the enrollment or attendance of an individual 
described in subparagraph (A)(i) or subpara-
graph (A)(ii). 
‘‘(F) COMPUTER OR PERIPHERAL EQUIP-
MENT.— 
‘‘(i) DEFINED.—For purposes of this 
paragraph, the term ‘computer or periph-
eral equipment’ means expenses for the 
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purchase of computer or peripheral equip-
ment (as defined in section 168(i)(2)(B), 
computer software (as defined in section 
197(e)(3)(B))), or internet access and re-
lated services, if such equipment, software, 
or services are to be used primarily by the 
individual during any of the years the indi-
vidual is enrolled at an eligible educational 
institution. 
‘‘(ii) DOLLAR
LIMIT
ON
AMOUNT 
CREDITABLE.—The 
aggregate 
of 
the 
amounts paid or expenses incurred for 
computer or peripheral equipment which 
may be taken into account under this para-
graph for a taxable year by the taxpayer 
shall not exceed $1,000.’’, and 
(2) in subsection (g)(5)— 
(A) in the heading, by adding ‘‘OR CRED-
IT’’ at the end, and 
(B) by inserting ‘‘or credit’’ after ‘‘a de-
duction’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2022. 
Æ 
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