amended by redesignating section 222 as section 223 and
by inserting after section 221 the following new section:
‘‘SEC. 222. TUITION AND RELATED EXPENSES FOR POST-
SECONDARY EDUCATION.
‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an
individual, there shall be allowed as a deduction an
amount equal to the qualified tuition and related expenses
of an eligible student paid by the taxpayer during the tax-
able year.
‘‘(b) DOLLAR LIMITATIONS.—
‘‘(1) PER STUDENT.—The aggregate payments
during the taxable year for the qualified tuition and
related expenses of each individual which may be
taken into account under subsection (a) shall not ex-
ceed $10,000.
‘‘(2) PER TAXPAYER.—The amount allowed as
a deduction under subsection (a) for the taxable year
shall not exceed $20,000.
‘‘(3) PHASEOUT OF DEDUCTION.—
‘‘(A) IN
GENERAL.—The amount which
would (but for this subsection) be taken into ac-
count under subsection (a) shall be reduced
(but not below zero) by the amount determined
under subparagraph (B).
‘‘(B) 
AMOUNT
OF
REDUCTION.—The
amount determined under this subparagraph 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) $125,000 ($175,000 in the
case of a joint return), bears to
‘‘(ii) $20,000.
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—The term ‘modified adjusted gross in-
come’ 
means 
adjusted 
gross 
income
determined—
‘‘(i) without regard to this section and
sections 911, 931, and 933, and
‘‘(ii) after application of sections 86,
135, 137, 219, 221, and 469.
‘‘(c) DEFINITIONS.—For purposes of this section:
‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible
student’ has the meaning given to such term by sec-
tion 25A(b)(3).
‘‘(2) QUALIFIED
TUITION
AND
RELATED
EX-
PENSES.—The term ‘qualified tuition and related ex-
penses’ has the meaning given to such term by sec-
tion 25A(f)(1), reduced by the sum of—
‘‘(A) the amount excluded from gross in-
come under section 127, 135, or 530 by reason
of such expenses, and
‘‘(B) the amount of any scholarship, allow-
ance, 
or 
payment 
described 
in 
section
25A(g)(2).
‘‘(d) SPECIAL RULES.—
‘‘(1) ELIGIBLE
COURSES.—Amounts paid for
qualified tuition and related expenses of any indi-
vidual shall be taken into account under subsection
(a) only to the extent such expenses are attributable
to courses of instruction for which credit is allowed
toward a degree by an institution of higher edu-
cation or toward a certificate of required course
work at a vocational school.
‘‘(2) TAXPAYER WHO IS DEPENDENT OF AN-
OTHER TAXPAYER.—No deduction shall be allowed
to a taxpayer under subsection (a) for an amount
paid for the education of such taxpayer if such tax-
payer is a dependent of another person for a taxable
year beginning in the calendar year in which the tax-
able year of the taxpayer begins.
‘‘(3) SPOUSE.—No deduction shall be allowed
under subsection (a) for amounts paid during the
taxable year for qualified tuition and related ex-
penses of 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.’’.
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Section 62(a) of such Code is
amended by inserting after paragraph (17) the following
new paragraph:
‘‘(18) TUITION AND RELATED EXPENSES FOR
POSTSECONDARY
EDUCATION.—The deduction al-
lowed by section 222.’’.
(c) CONFORMING AND CLERICAL AMENDMENTS.—
(1) Subparagraph (A) of section 86(b)(2) of
such Code is amended by inserting ‘‘222,’’ after
‘‘221,’’.
(2) Subparagraph (A) of section 135(c)(4) of
such Code is amended by inserting ‘‘222,’’ after
‘‘221,’’.
(3) Subparagraph (A) of section 137(b)(3) of
such Code is amended by inserting ‘‘222,’’ after
‘‘221,’’.
(4) Clause (ii) of section 219(g)(3)(A) of such
Code is amended by inserting ‘‘222,’’ after ‘‘221,’’.
(5) Clause (i) of section 221(b)(2)(C) of such
Code is amended by inserting ‘‘222,’’ before ‘‘911,’’.
(6) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the item relating to section 221 and insert-
ing:
‘‘Sec. 222. Tuition and related expenses for postsecondary edu-
cation.
‘‘Sec. 223. Cross reference.’’.
(d) EFFECTIVE DATES.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
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