I 
114TH CONGRESS 
2D SESSION 
H. R. 4872 
To amend the Internal Revenue Code of 1986 to reform the American 
opportunity tax credit to support college savings. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 23, 2016 
Mr. BEN RAY LUJA´N of New Mexico introduced the following bill; which was 
referred to the Committee on Ways and Means, and in addition to the 
Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to reform 
the American opportunity tax credit to support college 
savings. 
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 ‘‘Save for Success Act’’. 
SEC. 2. AMERICAN OPPORTUNITY TAX CREDIT SAVINGS 
CREDIT. 
(a) IN GENERAL.—Section 25A of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
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(j) as subsection (k) and by inserting after subsection (i) 
the following: 
‘‘(j) SPECIAL RULES RELATING TO AOTC SAVINGS 
CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified tuition and related expenses’ 
with respect to any individual includes eligible col-
lege savings contributions for such individual. Such 
contributions shall be taken into account for pur-
poses of subsection (i)(1)(A) before tuition and fees. 
‘‘(2) LIMITATION.— 
‘‘(A) 
IN
GENERAL.—The 
aggregate 
amount of contributions with respect to an indi-
vidual which may be taken into account under 
paragraph (1) for a taxable year is $250. 
‘‘(B) PHASE OUT.—The dollar amount in 
subparagraph (A) shall be reduced (but not 
below zero) by the amount which bears the 
same ratio to such dollar amount as— 
‘‘(i) the number of percentage points 
(if any) in excess of 133 percent that the 
taxpayer’s household income for the tax-
able year is of the poverty line for a family 
of the size involved, bears to 
‘‘(ii) 400 percentage points. 
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‘‘(3) TERMS RELATING TO INCOME AND FAMI-
LIES.—The terms ‘family size’, ‘household income’, 
and ‘poverty line’ shall have the meanings given 
such terms by section 36B(d). 
‘‘(4) ELIGIBLE HIGHER EDUCATION CONTRIBU-
TION.—For purposes of paragraph (1), the term ‘eli-
gible college savings contribution’ with respect to an 
individual means the excess of— 
‘‘(A) contributions by the taxpayer in the 
taxable year to qualified college savings ac-
counts of which the individual is the bene-
ficiary, over 
‘‘(B) distributions from all such qualified 
college savings accounts for the taxable year. 
‘‘(5) 
QUALIFIED
COLLEGE
SAVINGS
AC-
COUNTS.—The term ‘qualified college savings ac-
count’ with respect to which such individual is the 
beneficiary means— 
‘‘(A) an account under a qualified tuition 
program (as defined by section 529), and 
‘‘(B) an account under a program of a 
State (or political jurisdiction thereof) estab-
lished exclusively for the purpose of paying for 
college tuition and other post-secondary edu-
cational expenses. 
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‘‘(6) PORTION
OF
CREDIT
MADE
REFUND-
ABLE.—So much of the credit allowed under sub-
section (a) as is attributable to this subsection (de-
termined after the application of subsection (i) and 
without regard to this subsection and section 26(a)) 
shall be treated as a credit allowable under subpart 
C (and not allowed under subsection (a)). The pre-
ceding 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.’’. 
(b) 
AOTC 
LIFETIME
LIMITATION.—Section 
25A(i)(2) of such Code is amended to read as follows: 
‘‘(2) LIMITATION.—In lieu of subparagraphs 
(A) and (C) of subsection (b)(2), the amount allowed 
as a credit under this section for the taxable year 
with respect to an individual shall not exceed— 
‘‘(A) $10,000, reduced 
‘‘(B) by the amount allowed under this 
section with respect to such individual for all 
prior taxable years.’’. 
(c) PILOT PROGRAM TO MAKE PERIODIC PAYMENTS 
AS COLLEGE EXPENSES INCURRED.—Section 25A(i) of 
such Code is amended by adding at the end the following: 
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‘‘(8) PILOT PROGRAM TO MAKE PERIODIC PAY-
MENTS AS COLLEGE EXPENSES INCURRED.— 
‘‘(A) IN GENERAL.—The Secretary of the 
Treasury and the Secretary of Education shall 
jointly establish a program designed to make 
payments periodically to or on behalf of an eli-
gible student as the student incurs qualified ex-
penses during the taxable year. The total 
amount that may be so paid to or on behalf of 
an eligible student through this program shall 
not exceed the credit which would (but for sub-
paragraph (B)) be allowable under this section 
if subsection (d) were applied by using the tax-
payer’s modified adjusted gross income for the 
preceding taxable year. 
‘‘(B) CREDIT
REDUCED
BY
PILOT
PRO-
GRAM PAYMENTS.—The credit allowable under 
this section (without regard to this subpara-
graph) for any taxable year shall be reduced 
(but not below zero) by the payments made 
with respect to a student under subparagraph 
(A) for expenses which would otherwise be 
taken into account in determining the credit 
under this section for such year. 
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‘‘(C) PROGRAM
PARTICIPATION.—Partici-
pation in the program established under this 
paragraph shall be voluntary with respect to 
both students and educational institutions; ex-
cept that, institutions which are taxable under 
this chapter (other than by reason of section 
511) may not participate in such program. 
‘‘(D) PROGRAM PERIOD.—The program es-
tablished under this paragraph shall apply to 
expenses for academic periods beginning during 
the 5-year period which begins on the date 
which is 1 year after the date of the enactment 
of this paragraph. 
‘‘(E) PAYMENTS
NOT
TREATED
AS
RE-
SOURCES
FOR
FINANCIAL
AID.—Payments 
made under this paragraph shall not be treated 
as resources for purposes of determining the 
amount of any financial aid which is funded in 
whole or part with Federal funds. Payments 
under the program shall not be made in a man-
ner that would reduce the State, private, or in-
stitutional aid available to an eligible student. 
‘‘(F) NOTICE OF PROGRAM.—Educational 
institutions participating in the program estab-
lished under this paragraph shall provide appro-
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priate notices to parents and students of the 
option of payments under such program. Such 
notices shall not be considered tax advice for 
purposes of any Federal law or regulation. 
‘‘(G) REPORTING.—The Secretary of the 
Treasury and the Secretary of Education shall 
jointly submit annual reports to Congress on 
the program established under this subsection, 
together with any recommendations with re-
spect to such program.’’. 
(d) 
CONFORMING
AMENDMENT.—Section 
6211(b)(4)(A) of such Code is amended by inserting ‘‘or 
(j)(6)’’ after ‘‘subsection (i)(6)’’. 
(e) INCREASED PUBLIC AWARENESS OF AMERICAN 
OPPORTUNITY TAX CREDIT.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury, or the Secretary’s delegate, in consultation with 
the Secretary of Education, shall establish a tax-
payer awareness program to inform the taxpaying 
public of the availability of the American Oppor-
tunity Tax Credit allowed under section 25A of the 
Internal Revenue Code of 1986. Such public aware-
ness program shall be designed to assure that indi-
viduals who may be eligible are informed of the 
availability of such credit and filing procedures. 
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(2) MEANS OF COMMUNICATIONS.— 
(A) IN GENERAL.—The Secretary of the 
Treasury, or the Secretary’s delegate, in con-
sultation with the Secretary of Education, shall 
use appropriate means of communication to 
carry out the provisions of this section. The 
taxpayer awareness program shall include, but 
not be limited to, prominent display of informa-
tion about the availability of the American Op-
portunity Tax Credit on information return 
forms specified by such Secretary for use by 
educational institutions to report qualified tui-
tion and related expenses incurred. 
(B) ADDITIONAL STEPS.—In addition, the 
Secretary of the Treasury, or the Secretary’s 
delegate, in consultation with the Secretary of 
Education, should— 
(i) make students aware of the Amer-
ican Opportunity Tax Credit through the 
data retrieval tool and the student aid re-
port of the Department of Education, 
(ii) include information on the finan-
cial aid shopping sheet, 
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(iii) include the American Opportunity 
Tax Credit in the volunteer income tax as-
sistance program, and 
(iv) bring awareness of the American 
Opportunity Tax Credit in the Federal 
TRIO Programs (commonly known as 
‘‘TRIO’’) under chapter 1 of subpart 2 of 
part A of title IV of the Higher Education 
Act of 1965 (20 U.S.C. 1070a–11 et seq.) 
and in the Gaining Early Awareness and 
Readiness for Undergraduate Programs 
(commonly known as ‘‘GEAR UP’’) under 
chapter 2 of subpart 2 of part A of title 
IV of such Act (20 U.S.C. 1070a–21 et 
seq.). 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2015. 
Æ 
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