‘‘(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 section and 
section 23) and section 27 for the taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 
student’ means, with respect to any academic period, 
any individual who 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 the Taxpayer Relief Act of 1997. 
‘‘(2) HIGHER EDUCATION EXPENSE.—The term 
‘higher education expense’ means any expense of a 
type which is 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 section) of— 
‘‘(A) the taxpayer, 
‘‘(B) the taxpayer’s spouse, or 
‘‘(C) any dependent of the taxpayer with 
respect to whom the taxpayer is allowed a de-
duction under section 151, 
VerDate Aug 31 2005 
19:48 May 27, 2007
Jkt 059196
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H2458.IH
H2458
rwilkins on PROD1PC63 with BILLS
at an eligible educational institution with respect to 
the attendance of such individual at such institution 
for the academic period for which the credit under 
this section is being determined. 
‘‘(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, as in effect 
on the date of the enactment of the Taxpayer 
Relief Act of 1997, and 
‘‘(B) which is eligible to participate in a 
program under title IV of the Higher Education 
Act of 1965. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) 
IDENTIFICATION
REQUIREMENT.—No 
credit shall be allowed under subsection (a) to a tax-
payer with respect to an eligible student unless the 
taxpayer includes the name and taxpayer identifica-
tion number of such student on the return of tax for 
the taxable year. 
‘‘(2) ADJUSTMENT
FOR
CERTAIN
SCHOLAR-
SHIPS.—The amount of higher education expenses 
otherwise taken into account under subsection (a) 
with respect to an individual for an academic period 
VerDate Aug 31 2005 
19:48 May 27, 2007
Jkt 059196
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H2458.IH
H2458
rwilkins on PROD1PC63 with BILLS
shall be reduced (before the application of sub-
sections (a) and (b)) by the sum of any amounts 
paid for the benefit of such individual which are allo-
cable to such period as— 
‘‘(A) a qualified scholarship which is ex-
cludable from gross income under section 117, 
‘‘(B) an educational assistance allowance 
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 
‘‘(C) a payment (other than a gift, be-
quest, devise, or inheritance within the meaning 
of section 102(a)) for such student’s edu-
cational expenses, or attributable to such indi-
vidual’s enrollment at an eligible educational in-
stitution, which is excludable from gross income 
under any law of the United States. 
‘‘(3) CREDIT
ALLOWED
ONLY
FOR
FIRST
YEARS OF GRADUATE EDUCATION.—No credit shall 
be allowed under subsection (a) for a taxable year 
with respect to the higher education expenses of an 
eligible student if the student has completed (before 
the beginning of such taxable year) 2 years of grad-
uate education at one or more eligible educational 
institutions. 
VerDate Aug 31 2005 
19:48 May 27, 2007
Jkt 059196
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H2458.IH
H2458
rwilkins on PROD1PC63 with BILLS