Catch Up Our Kids Act of 2022
Bill: S.4726 | Sponsor: Sen. Cruz, Ted (R-TX)
Policy area: Taxation

Summary:
Catch Up Our Kids Act of 2022
This bill provides tax benefits to compensate for learning losses due to school closures during the COVID-19 pandemic. The bill

To alleviate pandemic learning loss.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Catch Up Our Kids Act of 2022''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The COVID-19 pandemic and the resulting school 
        disruptions will have a profound and lasting impact on students 
        across the United States.
            (2) While most countries of the world closed schools at the 
        beginning of the pandemic as a precaution, the United States 
        was an outlier by keeping schools closed to in-person 
        instruction for unnecessarily extended periods of time and 
        favoring remote instruction.
            (3) There is no scientific evidence that showed elementary 
        or secondary schools to be vectors for community spread, nor 
        that school-aged children were uniquely vulnerable to the 
        COVID-19 virus. To date, schools have not been proven to be 
        major spreaders of COVID-19.
            (4) According to a study done by the Harvard University 
        Center for Education Policy Research, 30 percent of students in 
        elementary and secondary schools during the 2020-2021 school 
        year attended schools that conducted classes remotely for more 
        than 16 weeks.
            (5) The Harvard University study showed that high-poverty 
        districts and districts that serve predominately Black and 
        Hispanic students were more likely to have remote instruction. 
        The study also showed that remote instruction was a primary 
        driver of widening academic achievement gaps.
            (6) The achievement gaps and learning loss have proven 
        remote instruction to be a failure.
            (7) In mathematics, studies show that students who attended 
        mostly in-person instruction during the 2020-2021 school year 
        lost approximately 20 percent worth of a typical school year's 
        mathematics learning. Comparatively, students who spent most of 
        the school year in remote instruction lost 50 percent of math 
        instruction.
            (8) According to a McKinsey study, on average, students in 
        elementary and secondary schools are 3 months behind in reading 
        as a result of the pandemic school disruptions.
            (9) Pandemic school closures, and the consequent learning 
        loss, have reversed the progress made to narrow the academic 
        achievement gaps for historically disadvantaged groups. Low-
        income, Black, and Hispanic students fell further behind 
        compared to White, Asian, and high-income students.
            (10) Learning loss was shown to be less significant in 
        States and school districts that reopened in-person instruction 
        sooner. States with the lowest rates of remote instruction in 
        both high- and low-poverty districts, such as Texas and 
        Florida, saw smaller rates of learning loss and gaps in 
        achievement compared to States with the highest rates of remote 
        instruction.
            (11) If pandemic learning loss is permanent, studies show 
        that students who attend high-poverty schools may see a decline 
        of 5 percent in average earnings over their lifetimes. Overall, 
        elementary and secondary school learning loss could result in a 
        $2,000,000,000,000 decline in lifetime earnings.
            (12) All levels of government, elected officials, and those 
        working in education must make it a priority to pursue parent-
        driven and directed policies to help students catch up from 
        pandemic-related learning loss and close achievement gaps.

SEC. 3. USE OF UNOBLIGATED ESSER FUNDS FOR LEARNING LOSS SCHOLARSHIPS.

    (a) Definitions.--In this section:
            (1) Eligible student.--The term ``eligible student'' means 
        an elementary school or secondary school student--
                    (A) whose parent or legal guardian applied for a 
                learning loss scholarship under this section; and
                    (B) who is a citizen or national of the United 
                States or an alien (as defined in section 101(a) of the 
                Immigration and Nationality Act (8 U.S.C. 1101(a)) who 
                is lawfully present in the United States.
            (2) Scholarship-granting organization.--The term 
        ``scholarship-granting organization'' means an organization 
        that--
                    (A) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from taxation 
                under section 501(a) of such Code; and
                    (B) provides learning loss scholarships to eligible 
                students who--
                            (i) reside in the State in which the 
                        organization is recognized; or
                            (ii) in the case in which the organization 
                        received a subgrant from the Bureau of Indian 
                        Education, are members of a federally 
                        recognized Indian Tribe.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (4) State.--The term ``State'' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, 
        American Samoa, Guam, the Commonwealth of the Northern Mariana 
        Islands, the United States Virgin Islands, and the Department 
        of the Interior (acting through the Bureau of Indian 
        Education).
    (b) Transfer of Unobligated Funds.--The unobligated balance of 
funds made available to carry out section 18003 of division B of the 
CARES Act (Public Law 116-136), section 313 of the Coronavirus Response 
and Relief Supplemental Appropriations Act, 2021 (division M of Public 
Law 116-260), and section 2001 of the American Rescue Plan Act of 2021 
(20 U.S.C. 3401 note) are hereby transferred and shall be used by the 
Secretary to carry out this section.
    (c) Learning Loss Scholarships.--
            (1) Authorization.--The Secretary shall use amounts 
        transferred under subsection (b) to award grants to States that 
        submit applications under paragraph (2).
            (2) Applications.--A State that desires to receive a grant 
        under this section shall submit an application to the Secretary 
        at such time, in such manner, and accompanied by such 
        information as the Secretary may require.
            (3) Allocations to states.--The amount of each grant under 
        paragraph (1) shall be allocated by the Secretary to each State 
        in the same proportion as each State received under part A of 
        title I of the Elementary and Secondary Education Act of 1965 
        (20 U.S.C. 6311 et seq.) in the most recent fiscal year.
            (4) Subgrants to scholarship-granting organizations.--
                    (A) In general.--A State that receives a grant 
                under this section shall award subgrants to 
                scholarship-granting organizations to enable the 
                scholarship-granting organization to award learning 
                loss scholarships to the parents or legal guardians of 
                eligible students.
                    (B) Use of funds.--A parent or legal guardian of an 
                eligible student who receives a learning loss 
                scholarship may use the scholarship on behalf of the 
                eligible student for any of the following:
                            (i) Tuition for enrollment at an elementary 
                        school or secondary school, including at a 
                        private elementary school or secondary school.
                            (ii) Tutoring services.
                            (iii) Educational classes or curriculum 
                        inside or outside of the home.
                            (iv) Books, instructional materials, or 
                        online educational materials.
                            (v) Educational therapies, including 
                        educational therapies and services for students 
                        with disabilities.
                            (vi) Other educational and instructional 
                        materials as the student's parent or legal 
                        guardian determines is beneficial in-relation 
                        to at-home learning, including online or 
                        virtual schooling or home instruction.

SEC. 4. LEARNING LOSS TAX CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. LEARNING LOSS TAX CREDIT.

    ``(a) Allowance of Credit.--In the case of a taxpayer who is an 
eligible individual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year with respect to each 
qualifying child of the taxpayer an amount equal to $1,200.
    ``(b) Limitation.--Subsection (a) shall not apply in the case of a 
taxpayer with adjusted gross income for the taxable year in excess of--
            ``(1) $400,000 in the case of a joint return, and
            ``(2) $200,000 in any other case.
    ``(c) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means a citizen or national of the United States.
    ``(d) Qualifying Child.--For purposes of this section--
            ``(1) In general.--The term `qualifying child' means a 
        qualifying child of the taxpayer (as defined in section 152(c)) 
        for whom the taxpayer is allowed a deduction under section 151 
        for the taxable year and who is eligible to attend elementary 
        or secondary school within the State in which the taxpayer 
        resides for all or a portion of the taxable year.
            ``(2) Exception.--The term `qualifying child' shall not 
        include any individual who is not a citizen or national of the 
        United States.
    ``(e) Identification Requirements.--
            ``(1) Qualifying child identification requirement.--No 
        credit shall be allowed under this section to a taxpayer with 
        respect to any qualifying child unless the taxpayer includes 
        the name and taxpayer identification number of such qualifying 
        child on the return of tax for the taxable year and such 
        taxpayer identification number was issued on or before the due 
        date for filing such return.
            ``(2) Taxpayer identification requirement.--No credit shall 
        be allowed under this section if the taxpayer identification 
        number of the taxpayer was issued after the due date for filing 
        the return for the taxable year.
    ``(f) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the taxpayer, no 
credit shall be allowable under this section in the case of a taxable 
year covering a period of less than 12 months.
    ``(g) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 2024.''.
    (b) Clerical Amendment.--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 by inserting after the item relating to section 25D the 
following new item:

``Sec. 25E. Learning loss tax credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 5. EXCLUSION FOR EMPLOYEE CHILD EDUCATIONAL ASSISTANCE.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 127 
the following new section:

``SEC. 128. CHILDREN'S EDUCATIONAL ASSISTANCE PROGRAMS.

    ``(a) Exclusion From Gross Income.--
            ``(1) In general.--Gross income of an employee does not 
        include amounts paid or expenses incurred by the employer for 
        educational assistance to the employee's qualifying child if 
        the assistance is furnished pursuant to a program which is 
        described in subsection (b).
            ``(2) $2,000 maximum exclusion.--If, but for this 
        paragraph, this section would exclude from gross income more 
        than $2,000 of educational assistance furnished to an 
        individual with respect to any one child of the individual 
        during a calendar year, this section shall apply only to the 
        first $2,000 of such assistance so furnished with respect to 
        such child.
    ``(b) Children's Educational Assistance Program.--
            ``(1) In general.--For purposes of this section, a 
        children's educational assistance program is a separate written 
        plan of an employer for the exclusive benefit of the employees 
        of the employer to provide such employees' children with 
        educational assistance. The program must meet the requirements 
        of paragraphs (2) through (6) of this subsection.
            ``(2) Eligibility.--The program shall benefit employees who 
        qualify under a classification set up by the employer and found 
        by the Secretary not to be discriminatory in favor of employees 
        who are highly compensated employees (within the meaning of 
        section 414(q)) or their dependents. For purposes of this 
        paragraph, there shall be excluded from consideration employees 
        not included in the program who are included in a unit of 
        employees covered by an agreement which the Secretary of Labor 
        finds to be a collective bargaining agreement between employee 
        representatives and one or more employers, if there is evidence 
        that children's educational assistance benefits were the 
        subject of good faith bargaining between such employee 
        representatives and such employer or employers.
            ``(3) Other benefits as an alternative.--A program must not 
        provide eligible employees with a choice between children's 
        educational assistance and other remuneration includible in 
        gross income. For purposes of this section, the business 
        practices of the employer (as well as the written program) will 
        be taken into account.
            ``(4) No funding required.--A program referred to in 
        paragraph (1) is not required to be funded.
            ``(5) Notification of employees.--Reasonable notification 
        of the availability and terms of the program must be provided 
        to eligible employees.
    ``(c) Definitions; Special Rules.--For purposes of this section--
            ``(1) Educational assistance.--The term `educational 
        assistance', with respect to a qualifying child of an employee, 
        means the payment, by an employer, of expenses incurred by or 
        on behalf of an employee for such child for--
                    ``(A) curriculum and curricular materials,
                    ``(B) academic books or other instructional 
                materials,
                    ``(C) online educational materials,
                    ``(D) tuition for tutoring or educational classes 
                outside of the home, including at a tutoring facility, 
                but only if the tutor or instructor is not related to 
                the student and--
                            ``(i) is licensed as a teacher in any 
                        State,
                            ``(ii) has taught at an eligible 
                        educational institution (as defined in section 
                        529(e)(5)), or
                            ``(iii) is a subject matter expert in the 
                        relevant subject, or
                    ``(E) fees for a nationally standardized norm-
                referenced achievement test, an advanced placement 
                examination, or any examinations related to college or 
                university admission.
        The term `educational assistance' does not include any payment 
        for, or the provision of any benefits with respect to, any 
        course or other education involving sports, games, or hobbies.
            ``(2) Employee.--The term `employee' includes, for any 
        year, an individual who is an employee within the meaning of 
        section 401(c)(1) (relating to self-employed individuals).
            ``(3) Employer.--An individual who owns the entire interest 
        in an unincorporated trade or business shall be treated as the 
        individual's own employer. A partnership shall be treated as 
        the employer of each partner who is an employee within the 
        meaning of paragraph (2).
            ``(4) Qualifying child.--For purposes of this section--
                    ``(A) In general.--The term `qualifying child' 
                means a qualifying child of the taxpayer (as defined in 
                section 152(c)) for whom the taxpayer is allowed a 
                deduction under section 151 for the taxable year and 
                who is eligible to attend elementary or secondary 
                school within the State in which the taxpayer resides 
                for all or a portion of the taxable year.
                    ``(B) Exception for certain noncitizens.--The term 
                `qualifying child' shall not include any individual who 
                would not be a dependent if subparagraph (A) of section 
                152(b)(3) were applied without regard to all that 
                follows `resident of the United States'.
            ``(5) Attribution rules.--
                    ``(A) Ownership of stock.--Ownership of stock in a 
                corporation shall be determined in accordance with the 
                rules provided under subsections (d) and (e) of section 
                1563 (without regard to section 1563(e)(3)(C)).
                    ``(B) Interest in unincorporated trade or 
                business.--The interest of an employee in a trade or 
                business which is not incorporated shall be determined 
                in accordance with regulations prescribed by the 
                Secretary, which shall be based on principles similar 
                to the principles which apply in the case of 
                subparagraph (A).
            ``(6) Denial of double benefit.--No deduction or credit 
        shall be allowed to the employee under any other section of 
        this chapter for any amount excluded from income by reason of 
        this section.
    ``(d) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 2024.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 127 the 
following new item:

``Sec. 128. Children's educational assistance programs.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 6. TEMPORARY INCREASE IN CONTRIBUTION LIMIT FOR COVERDELL 
              EDUCATION SAVINGS ACCOUNTS.

    (a) In General.--Section 530 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(g) Increased Contribution Limit To Combat Pandemic-Induced 
Learning Loss.--In the case of any taxable year beginning in 2022, 
2023, or 2024, subsection (b)(1)(A)(iii) shall be applied by 
substituting `$4,000' for `$2,000'.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after December 31, 2021.

SEC. 7. SPECIAL RULES FOR QUALIFIED TUITION PROGRAMS.

    (a) In General.--Section 529 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (f) as subsection (g) and by 
inserting after subsection (e) the following new subsection:
    ``(f) Special Temporary Rules To Combat Pandemic-Induced Learning 
Loss.--
            ``(1) In general.--In the case of any taxable year 
        beginning in 2022, 2023, or 2024--
                    ``(A) subsection (c)(7) shall be applied--
                            ``(i) by substituting `qualified expenses' 
                        for `tuition', and
                            ``(ii) by treating qualified expenses in 
                        connection with a homeschool (whether treated 
                        as a homeschool or a private school for 
                        purposes of applicable State law) in the same 
                        manner as expenses in connection with 
                        enrollment or attendance at an elementary or 
                        secondary public, private, or religious school, 
                        and
                    ``(B) the last sentence of subsection (e)(3) shall 
                not apply.
            ``(2) Qualified expenses.--For purposes of apply paragraph 
        (1)(A), the term `qualified expenses' means the following:
                    ``(A) Tuition.
                    ``(B) Curriculum and curricular materials.
                    ``(C) Books or other instructional materials.
                    ``(D) Online educational materials.
                    ``(E) Tuition for tutoring or educational classes 
                outside of the home, including at a tutoring facility, 
                but only if the tutor or instructor is not related to 
                the student and--
                            ``(i) is licensed as a teacher in any 
                        State,
                            ``(ii) has taught at an eligible 
                        educational institution, or
                            ``(iii) is a subject matter expert in the 
                        relevant subject.
                    ``(F) Fees for a nationally standardized norm-
                referenced achievement test, an advanced placement 
                examination, or any examinations related to college or 
                university admission.
                    ``(G) Fees for dual enrollment in an institution of 
                higher education.
                    ``(H) Educational therapies for students with 
                disabilities provided by a licensed or accredited 
                practitioner or provider, including occupational, 
                behavioral, physical, and speech-language therapies.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 8. SPECIAL TEMPORARY GIFT TAX RULES FOR COVERDELL EDUCATION 
              SAVINGS ACCOUNTS AND QUALIFIED TUITION PROGRAMS.

    (a) Coverdell Education Savings Accounts.--Section 530 of the 
Internal Revenue Code of 1986, as amended by section 7, is amended by 
adding at the end the following new subsection:
    ``(h) Special Temporary Rules To Combat Pandemic-Induced Learning 
Loss.--Notwithstanding subsection (d)(3), in the case of any taxable 
year beginning in 2022, 2023, or 2024, any contribution to a Coverdell 
education savings account during such taxable year on behalf of any 
designated beneficiary shall not be treated as a gift for purposes of 
chapters 12 and 13.''.
    (b) Qualified Tuition Programs.--Section 529 of the Internal 
Revenue Code of 1986, as amended by section 8, is amended by 
redesignating subsection (g) as subsection (h) and by inserting after 
subsection (f) the following new subsection:
    ``(g) Special Temporary Rules To Combat Pandemic-Induced Learning 
Loss.--Notwithstanding paragraphs (2) and (5)(B) of subsection (c), in 
the case of any taxable year beginning in 2022, 2023, or 2024, any 
contribution to a qualified tuition program during such taxable year on 
behalf of any designated beneficiary shall not be treated as a gift for 
purposes of chapters 12 and 13.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2021.

SEC. 9. PROHIBITION OF CONTROL OVER NONPUBLIC EDUCATION PROVIDERS; 
              PARENTAL RIGHTS; STATE AND LOCAL AUTHORITY.

    (a) No Federal Control.--Nothing in this Act, or an amendment made 
by this Act, shall be construed to permit, allow, encourage, or 
authorize any Federal control over any aspect of any private, 
religious, or home education provider, whether or not a home education 
provider is treated as a private school or home school under State law. 
This Act, and any amendment made by this Act, shall not be construed to 
exclude private, religious, or home education providers from 
participation in programs or services under this Act, or an amendment 
made by this Act.
    (b) No Control by Entities Submitting Lists.--Nothing in this Act, 
or an amendment made by this Act, shall be construed to permit, allow, 
encourage, or authorize an entity submitting a list of eligible 
scholarship-granting organizations on behalf of a State to mandate, 
direct, or control any aspect of a private or home education provider, 
regardless of whether or not a home education provider is treated as a 
private school under State law.
    (c) No Exclusion or Discrimination.--No participating State or 
entity acting on behalf of a State shall exclude, discriminate against, 
or otherwise disadvantage any education provider with respect to 
programs or services under this Act, or an amendment made by this Act, 
based in whole or in part on the provider's religious education 
character or affiliation, including religiously or mission-based 
policies or practices.
    (d) Parental Rights To Use Scholarships.--No participating State or 
entity acting on behalf of a State shall disfavor or discourage the use 
of learning loss scholarships for the uses described in section 
3(c)(4)(B), including those services provided by private or nonprofit 
entities, such as faith-based providers.
    (e) State and Local Authority.--Nothing in this Act, or an 
amendment made by this Act, shall be construed to modify a State or 
local government's authority and responsibility to fund education.
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