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lated (within the meaning of section 267(b) or
707(b)(1)) to the taxpayer.
‘‘(2) QUALIFIED
HIGHER
EDUCATION
EX-
PENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
higher education expenses’ means the excess
of—
‘‘(i) tuition and fees required for the
enrollment or attendance of—
‘‘(I) the taxpayer,
‘‘(II) the taxpayer’s spouse, or
‘‘(III) any dependent of the tax-
payer with respect to whom the tax-
payer is allowed a deduction under
section 151,
as an eligible student at an institution of
higher education, over
‘‘(ii) the sum of—
‘‘(I) the amount excluded from
gross income under section 135 by
reason of such tuition and fees, and
‘‘(II) the amount of the reduction
described in section 135(d)(1).
‘‘(B) EXCEPTIONS.—Such term does not
include—
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‘‘(i) expenses with respect to any
course or other education involving sports,
games, or hobbies, unless such course or
other education is part of the student’s de-
gree program, and
‘‘(ii) student activity fees, athletic
fees, insurance expenses, or other expenses
unrelated to a student’s academic course of
instruction.
‘‘(C) ELIGIBLE STUDENT.—The term ‘eli-
gible student’ means, with respect to any aca-
demic period, a student who—
‘‘(i) meets the requirements of section
484(a)(1) of the Higher Education Act of
1965 (20 U.S.C. 1091(a)(1)), as in effect
on the date of the enactment of this sec-
tion, and
‘‘(ii) is carrying at least 1⁄2 the normal
full-time work load for the course of study
the student is pursuing, as reasonably de-
termined by the institution of higher edu-
cation.
‘‘(3) INSTITUTION OF HIGHER EDUCATION.—
The term ‘institution of higher education’ means an
institution—
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‘‘(A) which is described in section 481 of
the Higher Education Act of 1965 (20 U.S.C.
1088), as in effect on the date of the enactment
of this section, and
‘‘(B) which is eligible to participate in pro-
grams under title IV of such Act.
Such term includes an institution conducting an in-
ternship or residency program leading to a degree or
certificate awarded by an institution of higher edu-
cation, a hospital, or a health care facility which of-
fers postgraduate training.
‘‘(4) FULL-TIME
STUDENT.—The term ‘full-
time student’ means any student who is carrying at
least the normal full-time work load for the course
of study the student is pursuing, as reasonably de-
termined by the institution of higher education.
‘‘(5) HALF-TIME
STUDENT.—The term ‘half-
time student’ means any individual who would be a
student as defined in section 151(c)(4) if ‘half-time’
were substituted for ‘full-time’ each place it appears
in such section.
‘‘(6) DEPENDENT.—The term ‘dependent’ has
the meaning given such term by section 152.
‘‘(e) SPECIAL RULES.—
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‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under this section for any
amount for which a deduction is allowable under any
other provision of this chapter.
‘‘(2) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married at the close of
the taxable year, the deduction shall be allowed
under subsection (a) only if the taxpayer and the
taxpayer’s spouse file a joint return for the taxable
year.
‘‘(3) MARITAL STATUS.—Marital status shall be
determined in accordance with section 7703.’’
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a)
of section 62 of such Code is amended by inserting after
paragraph (16) the following new paragraph:
‘‘(17) INTEREST ON EDUCATION LOANS.—The
deduction allowed by section 221.’’
(c) REPORTING REQUIREMENT.—
(1) IN GENERAL.—Subpart B of part III of
subchapter A of chapter 61 of such Code (relating
to information concerning transactions with other
persons) is amended by inserting after section
6050R the following new section:
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‘‘SEC. 6050S. RETURNS RELATING TO EDUCATION LOAN IN-
TEREST RECEIVED IN TRADE OR BUSINESS
FROM INDIVIDUALS.
‘‘(a) EDUCATION LOAN INTEREST
OF $600 OR
MORE.—Any person—
‘‘(1) who is engaged in a trade or business, and
‘‘(2) who, in the course of such trade or busi-
ness, receives from any individual interest aggregat-
ing $600 or more for any calendar year on 1 or
more qualified education loans,
shall make the return described in subsection (b) with re-
spect to each individual from whom such interest was re-
ceived at such time as the Secretary may by regulations
prescribe.
‘‘(b) FORM AND MANNER OF RETURNS.—A return
is described in this subsection if such return—
‘‘(1) is in such form as the Secretary may pre-
scribe,
‘‘(2) contains—
‘‘(A) the name, address, and TIN of the
individual from whom the interest described in
subsection (a)(2) was received,
‘‘(B) the amount of such interest received
for the calendar year, and
‘‘(C) such other information as the Sec-
retary may prescribe.
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to make such return from the individual to whom
the statement is required to be furnished.
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the
year following the calendar year for which the return
under subsection (a) was required to be made.
‘‘(e) QUALIFIED EDUCATION LOAN DEFINED.—For
purposes of this section, except as provided in regulations
prescribed by the Secretary, the term ‘qualified education
loan’ has the meaning given such term by section
221(d)(1).
‘‘(f) RETURNS WHICH WOULD BE REQUIRED TO BE
MADE BY 2 OR MORE PERSONS.—Except to the extent
provided in regulations prescribed by the Secretary, in the
case of interest received by any person on behalf of an-
other person, only the person first receiving such interest
shall be required to make the return under subsection
(a).’’
(2) ASSESSABLE PENALTIES.—Section 6724(d)
of such Code (relating to definitions) is amended—
(A) by redesignating clauses (x) through
(xv) as clauses (xi) through (xvi), respectively,
in paragraph (1)(B) and by inserting after
clause (ix) of such paragraph the following new
clause:
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‘‘(x) section 6050S (relating to re-
turns relating to education loan interest re-
ceived in trade or business from individ-
uals),’’, and
(B) by striking ‘‘or’’ at the end of the next
to last subparagraph, by striking the period at
the end of the last subparagraph and inserting
‘‘, or’’, and by adding at the end the following
new subparagraph:
‘‘(Z) section 6050R (relating to returns re-
lating to education loan interest received in
trade or business from individuals).’’
(d) CLERICAL AMENDMENTS.—
(1) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the last item and inserting the following
new items:
‘‘Sec. 221. Interest on education loans.
‘‘Sec. 222. Cross reference.’’
(2) The table of sections for subpart B of part
III of subchapter A of chapter 61 of such Code is
amended by inserting after the item relating to sec-
tion 6050R the following new item:
‘‘Sec. 6050S. Returns relating to education loan interest received
in trade or business from individuals.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to any qualified education loan (as
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defined in section 221(d)(1) of the Internal Revenue Code
of 1986, as added by this section) incurred on, before, or
after the date of the enactment of this Act, but only with
respect to any loan interest payment due after December
31, 1996.
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