I 
115TH CONGRESS 
1ST SESSION 
H. R. 823 
To amend the Internal Revenue Code of 1986 to extend and modify the 
American Opportunity Tax Credit, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 2, 2017 
Mr. DOGGETT (for himself, Ms. PELOSI, Mr. NEAL, Ms. BROWNLEY of Cali-
fornia, Mrs. BUSTOS, Mr. BUTTERFIELD, Mr. CARTWRIGHT, Mr. CASTRO 
of Texas, Ms. JUDY CHU of California, Mr. CICILLINE, Mr. COHEN, Mr. 
CONYERS, Mr. CROWLEY, Mr. CUELLAR, Mr. CUMMINGS, Mr. DANNY K. 
DAVIS of Illinois, Mr. DEFAZIO, Mr. DELANEY, Ms. DELAURO, Ms. 
DELBENE, Mr. DEUTCH, Mr. ELLISON, Ms. ESTY, Mr. GALLEGO, Mr. 
GARAMENDI, Mr. HASTINGS, Mr. HIGGINS of New York, Mr. JEFFRIES, 
Ms. EDDIE BERNICE JOHNSON of Texas, Mr. JOHNSON of Georgia, Ms. 
KELLY of Illinois, Mr. KENNEDY, Mr. KILDEE, Mr. KIND, Mr. LAN-
GEVIN, Mr. LARSON of Connecticut, Ms. LEE, Mr. LEVIN, Mr. TED LIEU 
of California, Mr. LOEBSACK, Ms. MICHELLE LUJAN GRISHAM of New 
Mexico, Mr. LYNCH, Ms. MCCOLLUM, Mr. MCGOVERN, Mr. MEEKS, Ms. 
MENG, Ms. MOORE, Mr. NADLER, Mrs. NAPOLITANO, Mr. BRADY of 
Pennsylvania, Ms. NORTON, Mr. PALLONE, Mr. PASCRELL, Mr. POCAN, 
Mr. PRICE of North Carolina, Miss RICE of New York, Ms. ROYBAL- 
ALLARD, Mr. RYAN of Ohio, Mr. SARBANES, Ms. SCHAKOWSKY, Mr. 
SCHIFF, Mr. HOYER, Mr. SHERMAN, Mr. SWALWELL of California, Mr. 
TAKANO, Mr. THOMPSON of California, Ms. TITUS, Mrs. TORRES, Mr. 
VEASEY, Mrs. WATSON COLEMAN, Mr. BLUMENAUER, Mr. HECK, Ms. 
SLAUGHTER, Ms. KAPTUR, Ms. SHEA-PORTER, Ms. HANABUSA, and Mr. 
PAYNE) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to extend 
and modify the American Opportunity Tax Credit, and 
for other purposes. 
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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 ‘‘Expand American 
Educational Opportunity Act of 2017’’. 
SEC. 2. EXTENSION AND MODIFICATION OF AMERICAN OP-
PORTUNITY TAX CREDIT. 
(a) IN GENERAL.—Section 25A of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 25A. AMERICAN OPPORTUNITY TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual who is an eligible student for any taxable year, 
there shall be allowed as a credit against the tax imposed 
by this chapter for such taxable year the amount deter-
mined under subsection (b) with respect to such indi-
vidual. 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) STUDENT ENROLLED AT LEAST 1⁄2 TIME.— 
In the case of an eligible student who is carrying at 
least 1⁄2 the normal full-time workload for the course 
of study the student is pursuing, the amount deter-
mined under this subsection with respect to such in-
dividual is the sum of— 
‘‘(A) 100 percent of so much of the quali-
fied tuition and related expenses paid by the 
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taxpayer during the taxable year (for education 
furnished to the eligible student during any 
academic period beginning in such taxable year) 
as does not exceed $2,000, plus 
‘‘(B) 25 percent of such expenses so paid 
as exceeds $2,000 but does not exceed $4,000. 
‘‘(2) OTHER STUDENTS.—In the case of an eli-
gible student not described in paragraph (1), the 
amount determined under this subsection with re-
spect to such individual is 25 percent of so much of 
the qualified tuition and related expenses paid by 
the taxpayer during the taxable year (for education 
furnished to the eligible student during any aca-
demic period beginning in such taxable year) as does 
not exceed $10,000. 
‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount which would 
(but for this paragraph) be taken into account under 
this section for the taxable year shall be reduced 
(but not below zero) by the amount determined 
under paragraph (2). 
‘‘(2) AMOUNT
OF
REDUCTION.—The amount 
determined under this paragraph is the amount 
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which bears the same ratio to the amount which 
would be so taken into account as— 
‘‘(A) the excess of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for such taxable year, over 
‘‘(ii) $80,000 ($160,000 in the case of 
a joint return), bears to 
‘‘(B) $10,000 ($20,000 in the case of a 
joint return). 
‘‘(3) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of this paragraph, the term ‘modified 
adjusted gross income’ means the adjusted gross in-
come of the taxpayer for the taxable year increased 
by any amount excluded from gross income under 
section 911, 931, or 933. 
‘‘(d) OTHER LIMITATIONS AND SPECIAL RULES.— 
For purposes of this section: 
‘‘(1) LIFETIME
DOLLAR
LIMITATION.—In the 
case of qualified tuition and related expenses with 
respect to any eligible student, the aggregate 
amount of the credits allowed in the taxable year 
and any prior taxable year for such eligible student 
(whether beginning before or after Expand American 
Educational Opportunity Act of 2017) shall not ex-
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ceed $15,000, determined without regard to wheth-
er— 
‘‘(A) such credits are claimed on the re-
turn of tax filed by the eligible student or by 
another taxpayer, or 
‘‘(B) such expenses are treated as paid by 
the eligible student or by another taxpayer. 
If, in any taxable year, the aggregate amount of 
such credits equals or exceeds $15,000, the amount 
allowed as a credit under subsection (a) in any sub-
sequent taxable year with respect to such student 
shall be zero. 
‘‘(2) IDENTIFICATION REQUIREMENTS.— 
‘‘(A) STUDENTS.— 
‘‘(i) IN GENERAL.—No credit shall be 
allowed under this section to a taxpayer 
with respect to the qualified tuition and re-
lated expenses of an eligible student unless 
the taxpayer includes the name and tax-
payer identification number of such eligible 
student on the return of tax for the taxable 
year. 
‘‘(ii) ISSUANCE.—The requirements of 
clause (i) shall not be treated as met un-
less the individual’s taxpayer identification 
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number was issued on or before the due 
date for filing the return of tax for the tax-
able year. 
‘‘(B) TAXPAYER.—No credit shall be al-
lowed under this section if the identifying num-
ber of the taxpayer was issued after the due 
date for filing the return for the taxable year. 
‘‘(C) INSTITUTION.—No credit shall be al-
lowed under this section unless the taxpayer in-
cludes the employer identification number of 
any institution to which qualified tuition and 
related expenses were paid with respect to the 
individual. 
‘‘(3) ADJUSTMENT
FOR
CERTAIN
SCHOLAR-
SHIPS, ETC.— 
‘‘(A) IN GENERAL.—The amount of quali-
fied tuition and related expenses otherwise 
taken into account under this section with re-
spect to an individual for an academic period 
shall be reduced (before the application of sub-
sections (b) and (c)) by the sum of any 
amounts paid for the benefit of such individual 
which are allocable to such period as— 
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‘‘(i) a qualified scholarship which is 
excludable from gross income under section 
117, 
‘‘(ii) an educational assistance allow-
ance under chapter 30, 31, 32, 34, or 35 
of title 38, United States Code, or under 
chapter 1606 of title 10, United States 
Code, and 
‘‘(iii) a payment (other than a gift, 
bequest, devise, or inheritance within the 
meaning of section 102(a)) for such indi-
vidual’s educational expenses, or attrib-
utable to such individual’s enrollment at an 
eligible educational institution, which is ex-
cludable from gross income under any law 
of the United States. 
‘‘(B) COORDINATION WITH PELL GRANTS 
NOT USED FOR QUALIFIED TUITION AND RE-
LATED
EXPENSES.—Any amount determined 
with respect to an individual under subpara-
graph (A) which is attributable to a Federal 
Pell Grant under section 401 of the Higher 
Education Act of 1965 shall be reduced (but 
not below zero) by the amount of the expenses 
(other than qualified tuition and related ex-
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penses) which are taken into account in deter-
mining the cost of attendance (as defined in 
section 472 of the Higher Education Act of 
1965, as in effect on the date of the enactment 
of the Expand American Educational Oppor-
tunity Act of 2017) of such individual at an eli-
gible educational institution for the academic 
period for which the credit under this section is 
being determined. 
‘‘(4) TREATMENT OF EXPENSES PAID BY DE-
PENDENT.—If a deduction under section 151 with 
respect to an individual is allowed to another tax-
payer for a taxable year beginning in the calendar 
year in which such individual’s taxable year begins— 
‘‘(A) no credit shall be allowed under this 
section to such individual for such individual’s 
taxable year, and 
‘‘(B) qualified tuition and related expenses 
paid by such individual during such individual’s 
taxable year shall be treated for purposes of 
this section as paid by such other taxpayer. 
‘‘(5) 
TREATMENT
OF
CERTAIN
PREPAY-
MENTS.—If qualified tuition and related expenses 
are paid by the taxpayer during a taxable year for 
an academic period which begins during the first 3 
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months following such taxable year, such academic 
period shall be treated for purposes of this section 
as beginning during such taxable year. 
‘‘(6) DENIAL OF DOUBLE BENEFIT.—No credit 
shall be allowed under this section for any expense 
for which a deduction is allowed under any other 
provision of this chapter. 
‘‘(7) NO
CREDIT
FOR
MARRIED
INDIVIDUALS 
FILING SEPARATE RETURNS.—If the taxpayer is a 
married individual (within the meaning of section 
7703), this section shall apply only if the taxpayer 
and the taxpayer’s spouse file a joint return for the 
taxable year. 
‘‘(8) NONRESIDENT ALIENS.—If the taxpayer is 
a nonresident alien individual for any portion of the 
taxable year, this section shall apply only if such in-
dividual is treated as a resident alien of the United 
States for purposes of this chapter by reason of an 
election under subsection (g) or (h) of section 6013. 
‘‘(e) ELECTION NOT TO HAVE SECTION APPLY.—A 
taxpayer may elect not to have this section apply with re-
spect to the qualified tuition and related expenses of an 
individual for any taxable year. 
‘‘(f) DEFINITIONS.—For purposes of this section: 
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‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 
student’ means, with respect to any taxable year, an 
individual who— 
‘‘(A) is enrolled for at least one academic 
period which begins during such taxable year at 
an eligible educational institution, and 
‘‘(B) meets the requirements of section 
484(a)(1) of the Higher Education Act of 1965, 
as in effect on the date of the enactment of the 
Expand American Educational Opportunity Act 
of 2017. 
‘‘(2) QUALIFIED
TUITION
AND
RELATED
EX-
PENSES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
tuition and related expenses’ means tuition, 
fees, and course materials required for the en-
rollment or attendance of— 
‘‘(i) the taxpayer, 
‘‘(ii) the taxpayer’s spouse, or 
‘‘(iii) any dependent of the taxpayer 
with respect to whom the taxpayer is al-
lowed a deduction under section 151, 
at an eligible educational institution for courses 
of instruction of such individual at such institu-
tion. 
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‘‘(B) EXCEPTION FOR EDUCATION INVOLV-
ING SPORTS, ETC.—Such term does not include 
expenses with respect to any course or other 
education involving sports, games, or hobbies, 
unless such course or other education is part of 
the individual’s degree program. 
‘‘(C) 
EXCEPTION
FOR
NONACADEMIC 
FEES.—Such term does not include student ac-
tivity fees, athletic fees, insurance expenses, or 
other expenses unrelated to an individual’s aca-
demic course of instruction. 
‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.— 
The term ‘eligible educational institution’ means an 
institution— 
‘‘(A) which is described in section 481 of 
the Higher Education Act of 1965, as in effect 
on the date of the enactment of the Expand 
American Educational Opportunity Act of 
2017, and 
‘‘(B) which is eligible to participate in a 
program under title IV of such Act. 
‘‘(g) PORTION OF CREDIT REFUNDABLE.—The less-
er of— 
‘‘(1) the credit allowed under this section for a 
taxable year (determined after application of sub-
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sections (c)(1) and (d) and without regard to this 
subsection and section 26(a)(2), as the case may 
be), or 
‘‘(2) $1,500, 
shall be treated as a credit allowable under subpart C (and 
not allowed under this section). The preceding sentence 
shall not apply to any taxpayer for any taxable year if 
such taxpayer is a child to whom subsection (g) of section 
1 applies for such taxable year. 
‘‘(h) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
ERLY CLAIMED CREDIT IN PRIOR YEAR.— 
‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT 
OR RECKLESS CLAIMS.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section for any taxable year in 
the disallowance period. 
‘‘(B) DISALLOWANCE
PERIOD.—For pur-
poses of clause (i), the disallowance period is— 
‘‘(i) the period of 10 taxable years 
after the most recent taxable year for 
which there was a final determination that 
the taxpayer’s claim of credit under this 
section was due to fraud, and 
‘‘(ii) the period of 2 taxable years 
after the most recent taxable year for 
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which there was a final determination that 
the taxpayer’s claim of credit under this 
section was due to reckless or intentional 
disregard of rules and regulations (but not 
due to fraud). 
‘‘(2) TAXPAYERS
MAKING
IMPROPER
PRIOR 
CLAIMS.—In the case of a taxpayer who is denied 
credit under this section for any taxable year as a 
result of the deficiency procedures under subchapter 
B of chapter 63, no credit shall be allowed under 
this section for any subsequent taxable year unless 
the taxpayer provides such information as the Sec-
retary may require to demonstrate eligibility for 
such credit. 
‘‘(i) INFLATION ADJUSTMENT.—In the case of any 
taxable year beginning in a calendar year after 2018, each 
dollar amount in subsections (b) and (c)(2), and (d)(1) 
shall be increased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by substituting 
‘calendar year 2017’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
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In the case of subsections (b) and (d)(1), any increase de-
termined under the preceding sentence shall be rounded 
to the nearest multiple of $50. In the case of subsection 
(c)(2), any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of $500. 
‘‘(j) REGULATIONS.—The Secretary may prescribe 
such regulations as may be necessary or appropriate to 
carry out this section, including regulations providing for 
a recapture of the credit allowed under this section in 
cases where there is a refund in a subsequent taxable year 
of any amount which was taken into account in deter-
mining the amount of such credit.’’. 
(b) RETENTION OF LIMITATION.— 
(1) IN GENERAL.—Subparagraph (D) of section 
25A(b)(2) of the Internal Revenue Code of 1986, as 
in effect before the enactment of the Expand Amer-
ican Educational Opportunity Act of 2017 hereby 
transferred to section 25A of such Code, as amended 
by subsection (a), and is inserted as a new sub-
section (d)(9) of section 25A, as so amended. 
(2) CONFORMING AMENDMENT.—Paragraph (9) 
of section 25A(d) of such Code, as transferred and 
inserted by paragraph (1), is amended by striking 
‘‘The Hope Scholarship Credit under subsection 
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(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 3. EXPANSION OF PELL GRANT EXCLUSION FROM 
GROSS INCOME. 
(a) IN GENERAL.—Paragraph (1) of section 117(b) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘received by an individual’’ and all that follows and 
inserting ‘‘received by an individual— 
‘‘(1) 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 
‘‘(2) 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 Expand Amer-
ican Educational Opportunity Act of 2017).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
Æ 
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