Fair Treatment of Scholarships Act of 2016

Bill: 114-hr-5730
Sponsor: full_name: Rep. Messer, Luke [R-IN-6]
Introduced: 2016-07-12
Policy area: Taxation
Subjects: Higher education

Income tax exclusion

Inflation and prices

Research administration and funding

Student aid and college costs
Latest action: action_date: 2016-07-12
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2016-07-12
action_desc: Introduced in House
text: <p><b>Fair Treatment of Scholarships Act of 2016 </b></p> <p>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. </p> <p>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 &quot;qualified tuition and related expenses&quot; include fees, books, supplies, and equipment required for research at the educational organization. </p> <p>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 2016. </p>

tv_txt: I 114th CONGRESS 2d Session H. R. 5730 IN THE HOUSE OF REPRESENTATIVES July 12, 2016 Mr. Messer (for himself, Ms. Stefanik , and Mr. Hurd of Texas ) 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.

1. Short title This Act may be cited as the Fair Treatment of Scholarships Act of 2016 . 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) in the case of an eligible student (as defined in section 25A(b)(3)), 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 2016, 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 2015 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, 2015.