I
105TH CONGRESS
1ST SESSION
H. R. 1633
To amend the Internal Revenue Code of 1986 to allow a refundable credit
for education expenses.
IN THE HOUSE OF REPRESENTATIVES
MAY 15, 1997
Mr. PITTS 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 allow a
refundable credit for education expenses.
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 ‘‘Children’s Education
Tax Credit Act’’.
SEC. 2. CREDIT FOR EDUCATION EXPENSES.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. EDUCATION EXPENSES.
‘‘(a) GENERAL RULE.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by this subtitle for the taxable year, the amount of the
qualified education expenses paid by the taxpayer during
the taxable year for the education of the taxpayer, the tax-
payer’s spouse, or any individual with respect to whom the
taxpayer is allowed a deduction under section 151(c).
‘‘(b) LIMITATION.—
‘‘(1) AMOUNT PER INDIVIDUAL.—The amount
allowed as a credit under subsection (a) for any tax-
able year with respect to the qualified education ex-
penses of any 1 individual shall not exceed $450.
‘‘(2) PRORATION
OF
CREDIT
WHERE
MORE
THAN
ONE
TAXPAYER
PAYS
EXPENSES.—If the
qualified education expenses of an individual are
paid by more than one taxpayer during any calendar
year, the dollar limitation under paragraph (1) shall
be allocated among such taxpayers in proportion to
their respective shares of the qualified education ex-
penses of such individual paid during such calendar
year by all such taxpayers.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED EDUCATION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
education expenses’ means amounts paid for—
‘‘(i) tuition and fees required for the
enrollment or attendance of a student at
an eligible educational institution, and
‘‘(ii) fees, books, supplies, and equip-
ment required for courses of instruction at
an eligible educational institution.
‘‘(B) MEALS AND LODGING EXPENSES NOT
INCLUDED.—Such term does not include any
amount paid, directly or indirectly, for meals,
lodging, or similar personal, living, or family ex-
penses. In the event an amount paid for tuition
or fees includes an amount for meals, lodging,
or similar expenses which is not separately stat-
ed, the portion of such amount which is attrib-
utable to meals, lodging, or similar expenses
shall be determined under regulations pre-
scribed by the Secretary.
‘‘(C) SPECIAL RULE FOR HOME SCHOOL-
ING.—In the case of education furnished in the
home (as a substitute for public education)
which meets the requirements of State law re-
lating to compulsory school attendance, the
term ‘qualified education expenses’ means
amounts paid for books, computer software,
and other supplies used in furnishing such edu-
cation.
‘‘(2) ELIGIBLE EDUCATIONAL INSTITUTION.—
The term ‘eligible educational institution’ means—
‘‘(A) an institution of higher education,
‘‘(B) a vocational school,
‘‘(C) a secondary school, or
‘‘(D) an elementary school.
‘‘(3) INSTITUTION OF HIGHER EDUCATION.—
The term ‘institution of higher education’ means the
institutions described in section 1201(a) or 481(a)
of the Higher Education Act of 1965.
‘‘(4) VOCATIONAL
SCHOOL.—The term ‘voca-
tional school’ means an area vocational education
school as defined in section 521(3) of the Carl D.
Perkins Vocational Education Act.
‘‘(5) 
ELEMENTARY
AND
SECONDARY
SCHOOLS.—The terms ‘elementary school’ and ‘sec-
ondary school’ have the respective meanings given
such terms by section 14101 of the Elementary and
Secondary Education Act of 1965.
‘‘(d) SPECIAL RULES.—
‘‘(1) ADJUSTMENT
FOR
CERTAIN
SCHOLAR-
SHIPS
AND
VETERANS’ BENEFITS.—The amounts
otherwise taken into account under subsection (a) as
qualified education expenses of any individual during
any period shall be reduced (before the application
of subsection (b)) by the sum of the amounts re-
ferred to in section 135(d)(1) which are received
with respect to such individual for the taxable year.
‘‘(2) ELIGIBLE COURSES.—Except as provided
in subsection (c)(1)(C), amounts paid for qualified
education expenses of any individual shall be taken
into account under subsection (a) only to the extent
such expenses—
‘‘(A) are attributable to courses of instruc-
tion offered by an elementary or secondary
school, or
‘‘(B) are attributable to courses of instruc-
tion for which credit is allowed toward a bacca-
laureate or graduate degree by an institution of
higher education or toward a certificate of re-
quired course work at a vocational school.
‘‘(3) INDIVIDUAL
MUST
BE
AT
LEAST
HALF-
TIME STUDENT.—Except as provided in subsection
(c)(1)(C), no credit shall be allowed under sub-
section (a) for amounts paid during the taxable year
for qualified education expenses with respect to any
individual unless that individual, during any 4 cal-
endar months during the calendar year in which the
taxable year of the taxpayer begins, is at least a
half-time student at an eligible education institution.
‘‘(4) SPOUSE.—No credit shall be allowed under
subsection (a) for amounts paid during the taxable
year for qualified education expenses for the spouse
of the taxpayer unless—
‘‘(A) the taxpayer is entitled to an exemp-
tion for his spouse under section 151(b) for the
taxable year, or
‘‘(B) the taxpayer files a joint return with
his spouse for the taxable year.
‘‘(e) DISALLOWANCE
OF EXPENSES
AS DEDUC-
TION.—No deduction shall be allowed under section 162
(relating to trade or business expenses) for any qualified
education expense which (after the application of sub-
section (b)) is taken into account in determining the
amount of any credit allowed under subsection (a). The
preceding sentence shall not apply to the qualified edu-
cation expenses of any taxpayer who, under regulations
prescribed by the Secretary, elects not to apply the provi-
sions of this section with respect to such expenses for the
taxable year.
‘‘(f) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary to carry out the pro-
visions of this section.’’
(b) TECHNICAL AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘or from section 35 of such Code’’.
(2) The table of sections for subpart C of part
IV of subchapter A of chapter 1 of such Code is
amended by striking the last item and inserting the
following new items:
‘‘Sec. 35. Education expenses.
‘‘Sec. 36. Overpayments of tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
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