I 
113TH CONGRESS 
1ST SESSION H. R. 3476 
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 
NOVEMBER 13, 2013 
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’’. 
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) 
$160,000 
(twice 
such 
amount in the case of a joint return), 
bears to 
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‘‘(ii) $20,000 ($40,000 in the case of 
a joint return). 
‘‘(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ means 
the adjusted gross income of the taxpayer for 
the taxable year increased by any amount ex-
cluded from gross income under section 911, 
931, or 933. 
‘‘(D) INFLATION
ADJUSTMENT.—In the 
case of any taxable year beginning after 2014, 
the 
$160,000 
amount 
in 
subparagraph 
(B)(i)(II) shall be increased by an amount 
equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2013’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
Any increase determined under the preceding 
sentence shall be rounded to the nearest mul-
tiple of $1,000. 
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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) REPORTING.—No credit shall be allowed 
under this section to a taxpayer with respect to the 
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qualified tuition and related expenses of an eligible 
student unless the taxpayer includes the name and 
taxpayer identification number of such eligible stu-
dent on the return of tax for the taxable year. 
‘‘(3) ADJUSTMENT
FOR
CERTAIN
SCHOLAR-
SHIPS, ETC.— 
‘‘(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-
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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. 
‘‘(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 such individual at an eligible 
educational institution for the academic 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 
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and the taxpayer’s spouse file a joint return for the 
taxable year. 
‘‘(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. 
‘‘(e) ELECTION NOT TO HAVE SECTION APPLY.—A 
taxpayer may elect not to have this section apply with re-
spect to the qualified tuition and related expenses of an 
individual for any taxable year. 
‘‘(f) DEFINITIONS.—For purposes of this section: 
‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 
student’ means, with respect to any taxable year, an 
individual who— 
‘‘(A) is enrolled for at least one academic 
period which begins during such taxable year at 
an eligible educational institution, and 
‘‘(B) meets the requirements of section 
484(a)(1) of the Higher Education Act of 1965, 
as in effect on the date of the enactment of the 
Middle Class College Tuition Tax Credit Ex-
pansion Act. 
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‘‘(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 the en-
rollment 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. 
‘‘(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. 
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‘‘(D) 
COMPUTER
TECHNOLOGY
AND 
EQUIPMENT.—Such term includes expenses for 
the purchase of computer technology or equip-
ment (as defined in section 170(e)(6)(F)(i)), or 
Internet access and related services, only to the 
extent the purchase of such technology, equip-
ment, or services is specifically required by the 
individual’s academic course of instruction or 
degree program. 
‘‘(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 Middle 
Class College Tuition Tax Credit Expansion 
Act, and 
‘‘(B) which is eligible to participate in a 
program under title IV of such Act. 
‘‘(g) PORTION OF CREDIT REFUNDABLE.—Fifty per-
cent of the credit allowed under this section (determined 
after application of subsections (c)(1) and (d) and without 
regard to this subsection and subsection (c)(2), as the case 
may be) shall be treated as a credit allowable under sub-
part C (and not allowed under this section). The preceding 
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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. 
‘‘(h) REGULATIONS.—The Secretary may prescribe 
such regulations as may be necessary or appropriate to 
carry out this section, including regulations providing for 
a recapture of the credit allowed under this section in 
cases where there is a refund in a subsequent taxable year 
of any amount which was taken into account in deter-
mining the amount of such credit.’’. 
(b) CLERICAL AMENDMENT.—The item relating to 
section 25A in the table of sections for subpart A of part 
IV of subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended to read as follows: 
‘‘Sec. 25A. American Opportunity Tax Credit.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Subparagraph (B) of section 72(t)(7) of 
such Code is amended by striking ‘‘25A(g)(2)’’ and 
inserting ‘‘25A(d)(3)’’. 
(2) Paragraph (2) of section 221(d) of such 
Code is amended— 
(A) by striking ‘‘25A(g)(2)’’ in subpara-
graph (B) and inserting ‘‘25A(d)(3)’’, and 
(B) by striking ‘‘25A(f)(2)’’ and inserting 
‘‘25A(f)(3)’’. 
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(3) Paragraph (3) of section 221(d) of such 
Code is amended by striking ‘‘25A(b)(3)’’ and in-
serting ‘‘25A(f)(1) (but only with respect to a stu-
dent who is carrying at least 1⁄2 the normal full-time 
workload for the course of study the student is pur-
suing)’’. 
(4) Clause (v) of section 529(c)(3)(B) of such 
Code is amended— 
(A) by striking ‘‘25A(g)(2)’’ in subclause 
(I) and inserting ‘‘25A(d)(3)’’, and 
(B) by striking ‘‘HOPE
AND
LIFETIME 
LEARNING CREDITS’’ in the heading and insert-
ing ‘‘AMERICAN OPPORTUNITY CREDIT’’. 
(5) Clause (i) of section 529(e)(3)(B) of such 
Code is amended by striking ‘‘25A(b)(3)’’ and in-
serting ‘‘25A(f)(1) (but only with respect to a stu-
dent who is carrying at least 1⁄2 the normal full-time 
workload for the course of study the student is pur-
suing)’’. 
(6) Subparagraph (C) of section 530(d)(2) of 
such Code is amended— 
(A) by striking ‘‘25A(g)(2)’’ in clause (i)(I) 
and inserting ‘‘25A(d)(3)’’, and 
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