American Opportunity Tax Credit Enhancement Act of 2021

Bill: 117-s-2465
Sponsor: full_name: Sen. Menendez, Robert [D-NJ]
Introduced: 2021-07-22
Policy area: Taxation
Latest action: action_date: 2021-07-22
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2021-07-22
action_desc: Introduced in Senate
text: <p><strong>American Opportunity Tax Credit Enhancement Act of 2021</strong></p> <p>This bill modifies the American Opportunity and Lifetime Learning tax credits to make the American Opportunity tax credit 100% refundable. It also modifies the provision denying the American Opportunity tax credit to students convicted of a federal or state felony relating to the possession or distribution of a controlled substance. Students may not be denied such credit unless the prison term for the drug offense is at least 15 years.</p>

tv_txt: II 117th CONGRESS 1st Session S. 2465 IN THE SENATE OF THE UNITED STATES July 22, 2021 Mr. Menendez (for himself, Mr. Brown , Mr. Wyden , and Mr. Padilla ) 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 make the American Opportunity Tax Credit fully refundable, and for other purposes.

1. Short title This Act may be cited as the American Opportunity Tax Credit Enhancement Act of 2021 . 2. Enhancement of American Opportunity Tax Credit (a) In general Section 25A of the Internal Revenue Code of 1986 is amended— (1) in subsection (b)— (A) by striking paragraph (1) and inserting the following: (1) Per student credit In the case of any eligible student for whom an election is in effect under this section for any taxable year, the American Opportunity Tax Credit is an amount equal to 100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $5,000. , and (B) in paragraph (2)(D)— (i) in the heading, by inserting serious before felony , and (ii) by striking Federal or State felony offense consisting of the possession or distribution of a controlled substance and inserting Federal drug-related offense for which the minimum term of imprisonment is not less than 15 years , (2) in subsection (d)— (A) in paragraph (1)— (i) in the heading, by striking In general and inserting Lifetime Learning Credit , (ii) by striking The American Opportunity Tax Credit and the Lifetime Learning Credit shall each and inserting The Lifetime Learning Credit shall , and (iii) by striking each such and inserting such , (B) by redesignating paragraph (2) as paragraph (3), and (C) by inserting after paragraph (1) the following: (2) American Opportunity Tax Credit In the case of the American Opportunity Tax Credit, paragraph (1) shall be applied— (A) in subparagraph (A)(ii) of such paragraph, by substituting $125,000 ($250,000 for $80,000 ($160,000 , and (B) in subparagraph (B) of such paragraph, by substituting $25,000 ($50,000 for $10,000 ($20,000 . , and (3) in subsection (i)— (A) in the heading, by striking Portion of , and (B) by striking Forty percent and inserting 100 percent . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.