H. R. 1—198 
for purposes of determining the eligibility of such individual or 
any other individual for benefits or assistance, or the amount or 
extent of benefits or assistance, under any Federal program or 
under any State or local program financed in whole or in part 
with Federal funds. 
(d) AUTHORITY
RELATING
TO
CLERICAL
ERRORS.—Section 
6213(g)(2) is amended by striking ‘‘and’’ at the end of subparagraph 
(L)(ii), by striking the period at the end of subparagraph (M) and 
inserting ‘‘, and’’, and by adding at the end the following new 
subparagraph: 
‘‘(N) an omission of the reduction required under sec-
tion 36A(c) with respect to the credit allowed under section 
36A or an omission of the correct social security account 
number required under section 36A(d)(1)(B).’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A) is amended by inserting ‘‘36A,’’ 
after ‘‘36,’’. 
(2) Section 1324(b)(2) of title 31, United States Code, is 
amended by inserting ‘‘36A,’’ after ‘‘36,’’. 
(3) The table of sections for subpart C of part IV of sub-
chapter A of chapter 1 is amended by inserting after the item 
relating to section 36 the following new item: 
‘‘Sec. 36A. Making work pay credit.’’. 
(f) EFFECTIVE DATE.—This section, and the amendments made 
by this section, shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 1002. TEMPORARY INCREASE IN EARNED INCOME TAX CREDIT. 
(a) IN GENERAL.—Subsection (b) of section 32 is amended by 
adding at the end the following new paragraph: 
‘‘(3) SPECIAL
RULES
FOR
2009
AND
2010.—In the case of 
any taxable year beginning in 2009 or 2010— 
‘‘(A) INCREASED CREDIT PERCENTAGE FOR 3 OR MORE 
QUALIFYING
CHILDREN.—In the case of a taxpayer with 
3 or more qualifying children, the credit percentage is 
45 percent. 
‘‘(B) REDUCTION OF MARRIAGE PENALTY.— 
‘‘(i) IN
GENERAL.—The dollar amount in effect 
under paragraph (2)(B) shall be $5,000. 
‘‘(ii) INFLATION ADJUSTMENT.—In the case of any 
taxable year beginning in 2010, the $5,000 amount 
in clause (i) shall be increased by an amount equal 
to— 
‘‘(I) such dollar amount, multiplied by 
‘‘(II) 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 2008’ for ‘calendar year 1992’ in 
subparagraph (B) thereof. 
‘‘(iii) ROUNDING.—Subparagraph (A) of subsection 
(j)(2) shall apply after taking into account any increase 
under clause (ii).’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.
H. R. 1—199 
SEC. 1003. TEMPORARY INCREASE OF REFUNDABLE PORTION OF 
CHILD CREDIT. 
(a) IN GENERAL.—Paragraph (4) of section 24(d) is amended 
to read as follows: 
‘‘(4) SPECIAL
RULE
FOR
2009
AND
2010.—Notwithstanding 
paragraph (3), in the case of any taxable year beginning in 
2009 or 2010, the dollar amount in effect for such taxable 
year under paragraph (1)(B)(i) shall be $3,000.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008. 
SEC. 1004. AMERICAN OPPORTUNITY TAX CREDIT. 
(a) IN GENERAL.—Section 25A (relating to Hope scholarship 
credit) is amended by redesignating subsection (i) as subsection 
(j) and by inserting after subsection (h) the following new subsection: 
‘‘(i) AMERICAN OPPORTUNITY TAX CREDIT.—In the case of any 
taxable year beginning in 2009 or 2010— 
‘‘(1) INCREASE IN CREDIT.—The Hope Scholarship Credit 
shall be an amount equal to the sum of— 
‘‘(A) 100 percent of so much of the qualified tuition 
and related expenses paid by the taxpayer during the tax-
able 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) CREDIT
ALLOWED
FOR
FIRST
YEARS
OF
POST-SEC-
ONDARY EDUCATION.—Subparagraphs (A) and (C) of subsection 
(b)(2) shall be applied by substituting ‘4’ for ‘2’. 
‘‘(3) QUALIFIED TUITION AND RELATED EXPENSES TO INCLUDE 
REQUIRED
COURSE
MATERIALS.—Subsection (f)(1)(A) shall be 
applied by substituting ‘tuition, fees, and course materials’ for 
‘tuition and fees’. 
‘‘(4) INCREASE
IN
AGI
LIMITS
FOR
HOPE
SCHOLARSHIP 
CREDIT.—In lieu of applying subsection (d) with respect to the 
Hope Scholarship Credit, such credit (determined without 
regard to this paragraph) shall be reduced (but not below 
zero) by the amount which bears the same ratio to such credit 
(as so determined) as— 
‘‘(A) the excess of— 
‘‘(i) the taxpayer’s modified adjusted gross income 
(as defined in subsection (d)(3)) 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). 
‘‘(5) CREDIT
ALLOWED
AGAINST
ALTERNATIVE
MINIMUM 
TAX.—In the case of a taxable year to which section 26(a)(2) 
does not apply, so much of the credit allowed under subsection 
(a) as is attributable to the Hope Scholarship Credit shall 
not exceed the excess of— 
‘‘(A) the sum of the regular tax liability (as defined 
in section 26(b)) plus the tax imposed 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.
H. R. 1—200 
Any reference in this section or section 24, 25, 26, 25B, 904, 
or 1400C to a credit allowable under this subsection shall 
be treated as a reference to so much of the credit allowable 
under subsection (a) as is attributable to the Hope Scholarship 
Credit. 
‘‘(6) PORTION OF CREDIT MADE REFUNDABLE.—40 percent 
of so much of the credit allowed under subsection (a) as is 
attributable to the Hope Scholarship Credit (determined after 
application of paragraph (4) and without regard to this para-
graph and section 26(a)(2) or paragraph (5), as the case may 
be) shall be treated as a credit allowable under subpart C 
(and not allowed under subsection (a)). 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. 
‘‘(7) COORDINATION WITH MIDWESTERN DISASTER AREA BENE-
FITS.—In the case of a taxpayer with respect to whom section 
702(a)(1)(B) of the Heartland Disaster Tax Relief Act of 2008 
applies for any taxable year, such taxpayer may elect to waive 
the application of this subsection to such taxpayer for such 
taxable year.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 24(b)(3)(B) is amended by inserting ‘‘25A(i),’’ 
after ‘‘23,’’. 
(2) Section 25(e)(1)(C)(ii) is amended by inserting ‘‘25A(i),’’ 
after ‘‘24,’’. 
(3) Section 26(a)(1) is amended by inserting ‘‘25A(i),’’ after 
‘‘24,’’. 
(4) Section 25B(g)(2) is amended by inserting ‘‘25A(i),’’ after 
‘‘23,’’. 
(5) Section 904(i) is amended by inserting ‘‘25A(i),’’ after 
‘‘24,’’. 
(6) Section 1400C(d)(2) is amended by inserting ‘‘25A(i),’’ 
after ‘‘24,’’. 
(7) Section 6211(b)(4)(A) is amended by inserting ‘‘25A by 
reason of subsection (i)(6) thereof,’’ after ‘‘24(d),’’. 
(8) Section 1324(b)(2) of title 31, United States Code, is 
amended by inserting ‘‘25A,’’ before ‘‘35’’. 
(c) TREATMENT OF POSSESSIONS.— 
(1) PAYMENTS TO POSSESSIONS.— 
(A) MIRROR CODE POSSESSION.—The Secretary of the 
Treasury shall pay to each possession of the United States 
with a mirror code tax system amounts equal to the loss 
to that possession by reason of the application of section 
25A(i)(6) of the Internal Revenue Code of 1986 (as added 
by this section) with respect to taxable years beginning 
in 2009 and 2010. Such amounts shall be determined by 
the Secretary of the Treasury based on information pro-
vided by the government of the respective possession. 
(B) 
OTHER
POSSESSIONS.—The 
Secretary 
of 
the 
Treasury shall pay to each possession of the United States 
which does not have a mirror code tax system amounts 
estimated by the Secretary of the Treasury as being equal 
to the aggregate benefits that would have been provided 
to residents of such possession by reason of the application 
of section 25A(i)(6) of such Code (as so added) for taxable 
years beginning in 2009 and 2010 if a mirror code tax
H. R. 1—201 
system had been in effect in such possession. The preceding 
sentence shall not apply with respect to any possession 
of the United States unless such possession has a plan, 
which has been approved by the Secretary of the Treasury, 
under which such possession will promptly distribute such 
payments to the residents of such possession. 
(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED 
STATES INCOME TAXES.—Section 25A(i)(6) of such Code (as added 
by this section) shall not apply to a bona fide resident of 
any possession of the United States. 
(3) DEFINITIONS AND SPECIAL RULES.— 
(A) POSSESSION OF THE UNITED STATES.—For purposes 
of this subsection, the term ‘‘possession of the United 
States’’ includes the Commonwealth of Puerto Rico and 
the Commonwealth of the Northern Mariana Islands. 
(B) MIRROR CODE TAX SYSTEM.—For purposes of this 
subsection, the term ‘‘mirror code tax system’’ means, with 
respect to any possession of the United States, the income 
tax system of such possession if the income tax liability 
of the residents of such possession under such system is 
determined by reference to the income tax laws of the 
United States as if such possession were the United States. 
(C) TREATMENT OF PAYMENTS.—For purposes of section 
1324(b)(2) of title 31, United States Code, the payments 
under this subsection shall be treated in the same manner 
as a refund due from the credit allowed under section 
25A of the Internal Revenue Code of 1986 by reason of 
subsection (i)(6) of such section (as added by this section). 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008. 
(e) APPLICATION OF EGTRRA SUNSET.—The amendment made 
by subsection (b)(1) shall be subject to title IX of the Economic 
Growth and Tax Relief Reconciliation Act of 2001 in the same 
manner as the provision of such Act to which such amendment 
relates. 
(f) TREASURY STUDIES REGARDING EDUCATION INCENTIVES.— 
(1) STUDY REGARDING COORDINATION WITH NON-TAX STU-
DENT FINANCIAL ASSISTANCE.—The Secretary of the Treasury 
and the Secretary of Education, or their delegates, shall— 
(A) study how to coordinate the credit allowed under 
section 25A of the Internal Revenue Code of 1986 with 
the Federal Pell Grant program under section 401 of the 
Higher Education Act of 1965 to maximize their effective-
ness at promoting college affordability, and 
(B) examine ways to expedite the delivery of the tax 
credit. 
(2) STUDY REGARDING INCLUSION OF COMMUNITY SERVICE 
REQUIREMENTS.—The Secretary of the Treasury and the Sec-
retary of Education, or their delegates, shall study the feasi-
bility of requiring including community service as a condition 
of taking their tuition and related expenses into account under 
section 25A of the Internal Revenue Code of 1986. 
(3) REPORT.—Not later than 1 year after the date of the 
enactment of this Act, the Secretary of the Treasury, or the 
Secretary’s delegate, shall report to Congress on the results 
of the studies conducted under this paragraph.