I 
113TH CONGRESS 
1ST SESSION H. R. 3393 
To amend the Internal Revenue Code of 1986 to consolidate certain tax 
benefits for educational expenses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 30, 2013 
Mrs. BLACK (for herself and Mr. DANNY K. DAVIS of Illinois) 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 consolidate 
certain tax benefits for educational expenses, 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 ‘‘Student and Family 
Tax Simplification Act’’. 
SEC. 2. CONSOLIDATION OF CERTAIN TAX BENEFITS FOR 
EDUCATIONAL EXPENSES. 
(a) AMERICAN OPPORTUNITY TAX CREDIT.—Section 
25A of the Internal Revenue Code of 1986 is amended 
to read as follows: 
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‘‘SEC. 25A. AMERICAN OPPORTUNITY TAX CREDIT. 
‘‘(a) IN GENERAL.—In the case of any individual for 
any taxable year, there shall be allowed as a credit against 
the tax imposed by this chapter for such taxable year an 
amount equal to the sum of— 
‘‘(1) 100 percent of so much of the qualified 
tuition and related expenses paid by the taxpayer 
during the taxable year (for education furnished to 
any eligible student for whom an election is in effect 
under this section for such taxable year during any 
academic period beginning in such taxable year) as 
does not exceed $2,000, plus 
‘‘(2) 25 percent of such expenses so paid as ex-
ceeds the dollar amount in effect under paragraph 
(1) but does not exceed twice such dollar amount. 
‘‘(b) PORTION OF CREDIT REFUNDABLE.—So much 
of the credit allowable under subsection (a) (determined 
without regard to this subsection and section 26(a) and 
after application of all other provisions of this section) as 
does not exceed $1,500 shall be treated as a credit allow-
able under subpart C (and not allowable under subsection 
(a)). The preceding sentence shall not apply to any tax-
payer for any taxable year if such taxpayer is a child to 
whom section 1(d) applies for such taxable year. 
‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
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‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) for any taxable year shall 
be reduced (but not below zero) by an amount which 
bears the same ratio to the amount so allowable (de-
termined without regard to this subsection and sub-
section (b) but after application of all other provi-
sions of this section) as— 
‘‘(A) the excess of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for such taxable year, over 
‘‘(ii) $43,000 (twice such amount in 
the case of a joint return), bears to 
‘‘(B) $20,000 (twice such amount in the 
case of a joint return). 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of this subsection, 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.— 
‘‘(1) CREDIT ALLOWED ONLY FOR 4 TAXABLE 
YEARS.—An election to have this section apply may 
not be made for any taxable year if such an election 
(by the taxpayer or any other individual) is in effect 
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(20 U.S.C. 1091(a)(1)), as in effect on August 
5, 1997, and 
‘‘(B) is carrying at least 1⁄2 the normal 
full-time work load for the course of study the 
student is pursuing. 
‘‘(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 enroll-
ment 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. 
‘‘(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. 
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‘‘(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 (20 U.S.C. 
1088), as in effect on August 5, 1997, and 
‘‘(B) which is eligible to participate in a 
program under title IV of such Act. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) 
IDENTIFICATION
REQUIREMENT.—No 
credit shall be allowed under subsection (a) to a tax-
payer with respect to the qualified tuition and re-
lated expenses of an individual unless the taxpayer 
includes the name and taxpayer identification num-
ber of such individual, and the employer identifica-
tion number of any institution to which such ex-
penses were paid, on the return of tax for the tax-
able year. 
‘‘(2) 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 subsection (a) with re-
spect to an individual for an academic period 
shall be reduced (before the application of sub-
section (c)) by the sum of any amounts paid for 
the benefit of such individual which are allo-
cable 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 individ-
ual’s educational expenses, or attributable 
to such individual’s enrollment at an eligi-
ble educational institution, which is exclud-
able 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 (20 U.S.C. 1070a) shall 
be reduced (but not below zero) by the amount 
of expenses (other than qualified tuition and re-
lated expenses) which are taken into account in 
determining 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 this paragraph) of such individual at an eligi-
ble educational institution for the academic pe-
riod for which the credit under this section is 
being determined. 
‘‘(3) 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 sub-
section (a) to such individual for such individ-
ual’s taxable year, and 
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‘‘(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. 
‘‘(4) 
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. 
‘‘(5) DENIAL OF DOUBLE BENEFIT.—No credit 
shall be allowed under this section for any amount 
for which a deduction is allowed under any other 
provision of this chapter. 
‘‘(6) 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. 
‘‘(7) 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 
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States for purposes of this chapter by reason of an 
election under subsection (g) or (h) of section 6013. 
‘‘(g) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a taxable 
year beginning after 2018, the $2,000 amount in 
subsection (a)(1), the $1,500 amount in subsection 
(b), and the $43,000 amount in subsection 
(c)(1)(A)(ii) shall each be increased by an amount 
equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2017’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under paragraph (1) is not a multiple of $100 
($1,000 in the case of the amount in subsection 
(c)(1)(A)(ii)), such amount shall be rounded to the 
next lowest multiple of $100 ($1,000 in the case of 
the amount in subsection (c)(1)(A)(ii)). 
‘‘(h) REGULATIONS.—The Secretary may prescribe 
such regulations or other guidance as may be necessary 
or appropriate to carry out this section, including regula-
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(i) by striking ‘‘section 25A(i)(6)’’ 
each place it appears and inserting ‘‘sec-
tion 25A(b)’’, and 
(ii) by striking ‘‘with respect to tax-
able years beginning after 2008 and before 
2018’’ each place it appears and inserting 
‘‘with respect to each taxable year’’, 
(B) in paragraph (2), by striking ‘‘Section 
25A(i)(6)’’ and inserting ‘‘Section 25A(b)’’, and 
(C) in paragraph (3)(C), by striking ‘‘sub-
section (i)(6)’’ and inserting ‘‘subsection (b)’’. 
(11) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the item 
relating to section 25A and inserting the following 
new item: 
‘‘Sec. 25A. American opportunity tax credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
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— 
(1) by striking the period at the end and insert-
ing ‘‘, or’’, 
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(2) by striking ‘‘received by an individual as a 
scholarship’’ and inserting the following: ‘‘received 
by an individual— 
‘‘(A) as a scholarship’’, and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) as a Federal Pell Grant under section 
401 of the Higher Education Act of 1965 (20 
U.S.C. 1070a).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
Æ 
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