I 
111TH CONGRESS 
1ST SESSION 
H. R. 106 
To amend the Internal Revenue Code of 1986 to allow individuals a 
refundable credit for higher education expenses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 6, 2009 
Mr. FATTAH 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 
individuals a refundable credit for higher 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 ‘‘American Opportunity 
Tax Credit Act of 2009’’. 
SEC. 2. REFUNDABLE CREDIT FOR HIGHER EDUCATION EX-
PENSES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 (relating to refundable credits) is amended by insert-
ing after section 36 the following new section: 
‘‘SEC. 36A. HIGHER EDUCATION EXPENSES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 
eligible student for whom an election is in effect under 
this section for any taxable year, there shall be allowed 
as a credit against the tax imposed by this subtitle for 
the taxable year an amount equal to 100 percent of so 
much of the higher education expenses paid by the tax-
payer during the taxable year (with respect to attendance 
of the eligible student at an eligible educational institution 
during any academic period beginning in such taxable 
year) as does not exceed $4,000. 
‘‘(b) LIMITATIONS.— 
‘‘(1) HIGHER
EDUCATION
EXPENSE
LIMITA-
TION.—The amount of higher education expenses 
taken into account under subsection (a) with respect 
to an individual for an academic period shall not ex-
ceed the individual’s 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 sec-
tion) for such period at the eligible educational insti-
tution with respect to which such higher education 
expenses were paid. 
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‘‘(2) 
LIFETIME
CREDIT
LIMITATION.—The 
amount of the credit allowed under subsection (a) 
for any taxable year with respect to any eligible stu-
dent shall not exceed the excess of— 
‘‘(A) $28,000, over 
‘‘(B) the aggregate credit allowed under 
subsection (a) with respect to such eligible stu-
dent for all prior taxable years. 
‘‘(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 
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‘‘(C) any dependent of the taxpayer with 
respect to whom the taxpayer is allowed a de-
duction under section 151, 
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. 
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‘‘(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 
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) COORDINATION WITH SECTION 25A.—The 
amount of higher education expenses otherwise 
taken into account under subsection (a) with respect 
to an individual for an academic period shall be re-
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duced (before the application of subsections (a) and 
(b)) by the amount of such expenses which are taken 
into account in determining the credit under section 
25A. 
‘‘(4) 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 
‘‘(B) higher education 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. 
‘‘(5) 
TREATMENT
OF
CERTAIN
PREPAY-
MENTS.—If higher education expense is paid by the 
taxpayer during a taxable year for an academic pe-
riod which begins during the first 3 months fol-
lowing such taxable year, such academic period shall 
be treated for purposes of this section as beginning 
during such taxable year. 
‘‘(6) DENIAL OF DOUBLE BENEFIT.—No credit 
shall be allowed under this section for any expense 
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for which deduction is allowed under any other pro-
vision of this chapter. 
‘‘(7) 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. 
‘‘(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) COMMUNITY SERVICE REQUIREMENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under this section for any taxable year with respect 
to the higher education expenses of a student unless 
the student satisfies the community service require-
ment of paragraph (2) for such year. The commu-
nity service requirement of paragraph (2) shall be 
treated as satisfied only if such service is verified 
under regulations prescribed by the Secretary of 
Education. 
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‘‘(2) REQUIREMENT.—The community service 
requirement of this paragraph is satisfied for any 
taxable year only if the student completes at least 
100 hours of volunteer service during such year 
for— 
‘‘(A) a governmental unit, 
‘‘(B) a hospital, or 
‘‘(C) an organization described in section 
501(c)(3) and exempt from tax under section 
501(a). 
For purposes of the preceding sentence, service shall 
not fail to be treated as volunteer service by reason 
of receiving a stipend for living expenses, but only 
if the aggregate stipends for the year does not ex-
ceed $600. 
‘‘(3) EXCEPTION FOR DEATH OR DISABILITY.— 
Paragraph (1) shall not apply if the failure to meet 
the community service requirement of paragraph (2) 
is by reason of the death or disability of the student. 
‘‘(f) CREDIT PAID DIRECTLY TO EDUCATIONAL IN-
STITUTION.—The Secretary of Education shall prescribe 
regulations under which— 
‘‘(1) a taxpayer may certify, before making pay-
ment of a higher education expense to an eligible 
educational institution, that the taxpayer reasonably 
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believes that credit would be allowed under this sec-
tion for such payment were it made, 
‘‘(2) the amount of credit, were such payment 
made, shall be paid to such institution and treated 
as payment of such expense, and 
‘‘(3) amounts paid under this subsection in ex-
cess of the proper amount of credit are recaptured 
from the taxpayer. 
‘‘(g) ELECTION NOT TO HAVE SECTION APPLY.— 
A taxpayer may elect not to have this section apply with 
respect to the higher education expenses of an individual 
for any 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 expense which was taken into account in deter-
mining the amount of such credit.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘36A,’’ after ‘‘36,’’. 
(2) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of such Code is 
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amended by inserting after the item relating to sec-
tion 36 the following new item: 
‘‘Sec. 36A. Higher education expenses.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid after December 
31, 2009, for education furnished in academic periods be-
ginning after such date. 
Æ 
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