I 
114TH CONGRESS 
2D SESSION 
H. R. 5383 
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 
JUNE 3, 2016 
Mr. ISRAEL introduced the following bill; which was referred to the Committee 
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. 
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 ‘‘Middle Class College 
Tuition Tax Credit Expansion Act of 2016’’. 
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: 
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‘‘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 
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 $2,500, plus 
‘‘(B) 50 percent of such expenses so paid 
as exceeds $2,500 but does not exceed $7,500. 
‘‘(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 50 percent of so much of 
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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) DOLLAR LIMITATIONS.— 
‘‘(1) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) IN
GENERAL.—The amount which 
would (but for this paragraph) be taken into ac-
count under this section for the taxable year 
shall be reduced (but not below zero) by the 
amount determined under paragraph (2). 
‘‘(B) 
AMOUNT
OF
REDUCTION.—The 
amount determined under this paragraph is the 
amount which bears the same ratio to the 
amount which would be so taken into account 
as— 
‘‘(i) the excess of— 
‘‘(I) the taxpayer’s modified ad-
justed gross income for such taxable 
year, over 
‘‘(II) 
$225,000 
(twice 
such 
amount in the case of a joint return), 
bears to 
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‘‘(2) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—The credit allowed under this section shall 
not exceed the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this subsection 
and sections 23, 25D, and 30D) and section 27 
for the taxable year. 
‘‘(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 individual, the aggregate amount of 
the credits claimed under this section for all taxable 
years shall not exceed $25,000, determined without 
regard to whether— 
‘‘(A) such credits are claimed on the re-
turn of tax filed by the individual or by another 
taxpayer, or 
‘‘(B) such expenses are treated as paid by 
the individual or by another taxpayer. 
‘‘(2) IDENTIFICATION NUMBERS.— 
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‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section to a taxpayer with re-
spect to the qualified tuition and related ex-
penses of an eligible student unless the tax-
payer includes the name and taxpayer identi-
fication number of such eligible student on the 
return of tax for the taxable year. 
‘‘(B) STUDENT.—The requirements of sub-
paragraph (A) shall not be treated as met un-
less the individual’s taxpayer identification 
number was issued on or before the due date 
for filing the return of tax for the taxable year. 
‘‘(C) 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. 
‘‘(D) 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.— 
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‘‘(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— 
‘‘(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. 
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‘‘(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-
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 Middle Class College Tuition Tax Credit 
Expansion Act of 2016) of such individual at 
an eligible educational institution for the aca-
demic 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— 
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‘‘(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 
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. 
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‘‘(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. 
‘‘(9) RESTRICTIONS ON TAXPAYERS WHO IM-
PROPERLY CLAIMED CREDIT IN PRIOR YEAR.— 
‘‘(A) TAXPAYERS MAKING PRIOR FRAUDU-
LENT OR RECKLESS CLAIMS.— 
‘‘(i) IN GENERAL.—No credit shall be 
allowed under this section for any taxable 
year in the disallowance period. 
‘‘(ii) DISALLOWANCE
PERIOD.—For 
purposes of clause (i), the disallowance pe-
riod is— 
‘‘(I) the period of 10 taxable 
years after the most recent taxable 
year for which there was a final deter-
mination 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 which there was a final deter-
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