American Opportunity Tax Credit Reform Act

Bill: 114-hr-6237
Sponsor: full_name: Rep. Davis, Danny K. [D-IL-7]
Introduced: 2016-09-28
Policy area: Taxation
Latest action: action_date: 2016-09-28
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2016-09-28
action_desc: Introduced in House
text: <p><b>American Opportunity Tax Credit Reform Act</b></p> <p>This bill amends the Internal Revenue Code, with respect to the American Opportunity Tax Credit, to provide that any credit amount which is attributable to a federal Pell Grant under the Higher Education Act of 1965 shall be reduced by the amount of expenses (other than qualified tuition and related expenses) which are taken into account in determining the cost of attendance at an&nbsp;institution of higher education for the academic period for which the credit amount is being determined.&nbsp; </p> <p>The bill also modifies the definition of "qualified scholarship," for purposes of the tax exclusion for such scholarships, to include a federal Pell Grant as a qualified scholarship.</p>

tv_txt: I 114th CONGRESS 2d Session H. R. 6237 IN THE HOUSE OF REPRESENTATIVES September 28, 2016 Mr. Danny K. Davis of Illinois 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 coordinate the reduction in the American Opportunity Tax Credit with Federal Pell Grants, to the extent such grants are attributable to expenses not eligible for such credit, and for other purposes.

1. Short title This Act may be cited as the American Opportunity Tax Credit Reform Act . 2. American Opportunity Tax Credit coordination with Pell grants (a) In general Section 25A(i) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (8) Coordination with Pell Grants not used for qualified tuition and related expenses For purposes of this subsection, any amount determined with respect to an individual under subsection (g)(2) which is attributable to a Federal Pell Grant under section 401 of the Higher Education Act of 1965 ( 20 U.S.C. 1070a ) shall be reduced (but not below zero) by the amount of expenses (other than qualified tuition and related expenses) which are taken into account in determining the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, as in effect on the date of the enactment of this paragraph) of such individual at an eligible educational institution for the academic period for which the credit under this section is being determined. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016. 3. Expansion of Pell Grant exclusion from gross income (a) In general Section 117(b)(1) of the Internal Revenue Code of 1986 is amended— (1) by striking the period at the end and inserting , or , (2) by striking received by an individual as a scholarship and inserting the following: received by an individual— (A) as a scholarship , and (3) by adding at the end the following new subparagraph: (B) as a Federal Pell Grant under section 401 of the Higher Education Act of 1965 ( 20 U.S.C. 1070a ). . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.