Title: Fair Treatment of Scholarships and Pell Grants Act of 2017
Policy area: Taxation

Summary:
Fair Treatment of Scholarships and Pell Grants Act of 2017
This bill amends the Internal Revenue Code to modify the provision which excludes from the gross income of a student any amount that is received as a qualified scholarship used for qualified tuition and related expenses.
The bill expands the exclusion to: (1) permit the scholarship to be used for room and board costs for which there is an allowance under the Higher Education Act of 1965; and (2) to specify that "qualified tuition and related expenses" include fees, books, supplies, and equipment required for research at the educational organization.
The amount included in qualified tuition and related expenses for research not required for a course of instruction may not exceed $300 per year, adjusted for inflation after 2017.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1764 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 1764

 To amend the Internal Revenue Code of 1986 to exclude room and board 
   costs and certain research expenses from gross income of certain 
                               students.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 28, 2017

  Mr. Messer 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 exclude room and board 
   costs and certain research expenses from gross income of certain 
                               students.

    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 ``Fair Treatment of Scholarships and 
Pell Grants Act of 2017''.

SEC. 2. EXCLUSION OF ROOM AND BOARD COSTS AND CERTAIN RESEARCH EXPENSES 
              FROM GROSS INCOME.

    (a) In General.--Section 117(b)(1) of the Internal Revenue Code of 
1986 is amended by striking ``used for qualified tuition and related 
expenses.'' and inserting the following: ``used--
                    ``(A) for qualified tuition and related expenses, 
                or
                    ``(B) for room and board costs.''.
    (b) Clarification With Respect to Research Expenses.--Section 
117(b)(2)(B) of such Code is amended by inserting ``or for research at 
such an educational organization'' before the period at the end.
    (c) Definitions.--Section 117(b) of such Code is amended by adding 
at the end the following new paragraph:
            ``(3) Room and board costs.--For purposes of paragraph (1), 
        the term `room and board costs' means room and board costs for 
        which there is an allowance under section 472(3) of the Higher 
        Education Act of 1965.''.
    (d) Limitation.--
            (1) In general.--Section 117(c) of such Code is amended by 
        adding at the end the following new paragraph:
            ``(3) Expenses for research.--
                    ``(A) In general.--The amount included in qualified 
                tuition and related expenses under subsection (b)(2)(B) 
                for a taxable year for research not required for a 
                course of instruction shall not exceed $300.
                    ``(B) Inflation adjustment.--In the case of any 
                taxable year beginning after 2017, the $300 amount in 
                subparagraph (A) shall be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2016' 
                        for `calendar year 1992' in subparagraph (B) of 
                        such section.
                    ``(C) Rounding.--If any increase determined under 
                subparagraph (B) is not a multiple of $5, such increase 
                shall be rounded to the nearest multiple of $5.''.
            (2) Conforming amendments.--Section 117(c) of such Code is 
        amended--
                    (A) in the heading, by striking ``Limitation'' and 
                inserting ``Limitations'', and
                    (B) in the heading of paragraph (1), by striking 
                ``In general'' and inserting ``Payment for teaching, 
                research, and other services''.
    (e) Effective Date.--The amendments made by this section apply with 
respect to amounts received in taxable years beginning after December 
31, 2016.
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