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) PORTION OF CREDIT REFUNDABLE.—The ag-
gregate credits allowed to a taxpayer under subpart C 
shall be increased by 50 percent of the portion of the 
amount of the credit which would have been allowed to 
the taxpayer under this section without regard to this sub-
section and the limitation under section 26(a)(2) or sub-
section (b)(4), as the case may be. The amount of the 
credit allowed under this subsection shall not be treated 
as a credit allowed under this subpart and shall reduce 
the amount of credit otherwise allowable under subsection 
(a) without regard to section 26(a)(2) or subsection 
(b)(3), as the case may be. 
‘‘(f) ELECTION NOT TO HAVE SECTION APPLY.—A 
taxpayer may elect not to have this section apply with re-
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spect to the higher education expenses of an individual for 
any taxable year. 
‘‘(g) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a taxable 
year beginning after 2008, the $50,000 amount in 
subsection (b)(3)(D) 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 2007’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under subparagraph (A) is not a multiple of $1,000, 
such amount shall be rounded to the next lowest 
multiple of $1,000. 
‘‘(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.’’. 
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(b) REPEAL OF DEDUCTION FOR QUALIFIED TUI-
TION AND RELATED EXPENSES.— 
(1) IN GENERAL.—Part VII of subchapter B of 
chapter 1 of such Code (relating to additional 
itemized deductions for individuals) is amended by 
striking section 222. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part VII of subchapter B of chapter 1 of 
such Code is amended by striking the item relating 
to section 222. 
(c) CONFORMING AMENDMENTS.— 
(1) Subsection (c) of section 23 of such Code 
is amended by striking ‘‘and 1400C’’ and inserting 
‘‘25A, and 1400C’’. 
(2) Subparagraph (B) of section 24(b)(3) of 
such Code is amended by striking ‘‘and 25B’’ and 
inserting ‘‘, 25A, and 25B’’. 
(3) Subparagraph (C) of section 25(e)(1) of 
such Code is amended— 
(A) by striking ‘‘25D’’ in clause (i) and in-
serting ‘‘25A, 25D’’, and 
(B) by striking ‘‘24’’ in clause (ii) and in-
serting ‘‘24, 25A’’. 
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(4) Paragraph (2) of section 25B(g) of such 
Code is amended by striking ‘‘section 23’’ and in-
serting ‘‘sections 23 and 25A’’. 
(5) Subsection (c) of section 25D of such Code 
is amended— 
(A) in paragraph (1) by inserting ‘‘and 
section 25A’’ after ‘‘other than this section’’, 
and 
(B) in paragraph (2) by striking ‘‘24’’ and 
inserting ‘‘24, 25A’’. 
(6) Subsection (d) of section 1400C of such 
Code is amended— 
(A) by striking ‘‘section 25D’’ in para-
graph (1) and inserting ‘‘sections 25A and 
25D’’, and 
(B) by striking ‘‘24’’ in paragraph (2) and 
inserting ‘‘24, 25A’’. 
(7) Section 62(a) of such Code is amended by 
striking paragraph (18). 
(8) Subparagraph (A) of section 86(b)(2) of 
such Code is amended by striking ‘‘, 222’’. 
(9) Subparagraph (B) of section 72(t)(7) of 
such 
Code 
is 
amended 
by 
striking 
‘‘section 
25A(g)(2)’’ and inserting ‘‘section 25A(d)(2)’’. 
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