Title: A bill to amend the Internal Revenue Code of 1986 to expand the deduction for interest on education loans, to extend and expand the deduction for qualified tuition and related expenses, and eliminate the limitation on contributions to Coverdell education savings accounts.
Policy area: Taxation

Summary:
This bill expands several tax deductions for education expenses. Specifically, the bill includes provisions that (1) allow an unlimited tax deduction for student loan interest, (2) repeal the dollar limitation on the tax deduction for qualified tuition and related expenses and make such deduction permanent, (3) allow carryovers to succeeding taxable years of amounts of the deductions for student loan interest and qualified tuition and related expenses that exceed a taxpayer's taxable income, and (4) repeal the dollar limitation on contributions to a Coverdell Education Savings Account.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1425 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1425

To amend the Internal Revenue Code of 1986 to expand the deduction for 
  interest on education loans, to extend and expand the deduction for 
qualified tuition and related expenses, and eliminate the limitation on 
         contributions to Coverdell education savings accounts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 13, 2019

   Mr. Paul introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to expand the deduction for 
  interest on education loans, to extend and expand the deduction for 
qualified tuition and related expenses, and eliminate the limitation on 
         contributions to Coverdell education savings accounts.

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

SECTION 1. EXPANSION OF DEDUCTION FOR INTEREST ON EDUCATION LOANS.

    (a) Elimination of Cap on Deduction.--Section 221 of the Internal 
Revenue Code of 1986 is amended by striking subsections (b) and (f).
    (b) Carryover of Excess Interest.--Section 221 of the Internal 
Revenue Code of 1986, as amended by subsection (a), is amended by 
inserting after subsection (a) the following new subsection:
    ``(b) Carryover.--If the amount of the deduction allowable under 
subsection (a) exceeds the taxable income of the taxpayer for the 
taxable year (determined without regard to this section and section 
222), then an amount equal to such excess shall be treated as interest 
paid by the taxpayer in the succeeding taxable year on a qualified 
education loan.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 2. EXPANSION OF DEDUCTION FOR QUALIFIED TUITION AND RELATED 
              EXPENSES.

    (a) Elimination of Dollar Limitation; Carryover of Excess 
Expenses.--
            (1) In general.--Subsection (b) of section 222 of the 
        Internal Revenue Code of 1986 is amended to read as follows:
    ``(b) Carryover.--If the amount of the deduction allowable under 
subsection (a) exceeds the taxable income of the taxpayer for the 
taxable year (determined without regard to this section), then an 
amount equal to such excess shall be treated as qualified tuition and 
related expenses paid by the taxpayer in the succeeding taxable 
year.''.
            (2) Conforming amendment.--Paragraph (3) of section 222(d) 
        of such Code is amended by striking ``deduction.--'' and 
        inserting ``deduction.--Except as provided in subsection (b)--
        ''.
    (b) Permanent Extension.--Section 222 of the Internal Revenue Code 
of 1986 is amended by striking subsection (e).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 3. EXPANSION OF RULES FOR COVERDELL EDUCATION SAVINGS ACCOUNTS.

    (a) Elimination of Contribution Limitation.--
            (1) In general.--Section 530(b)(1)(A) of the Internal 
        Revenue Code of 1986 is amended by inserting ``or'' at the end 
        of clause (i), by striking ``, or'' at the end of clause (ii) 
        and inserting a period, and by striking clause (iii).
            (2) Conforming amendment.--Section 530 of such Code is 
        amended by striking subsection (c).
    (b) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after the date 
of the enactment of this Act.
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