,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #cdcg  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,octob] #cj1 #bjac,ms4
 ,s*w>tz introduc$ ! foll[+ bill2 :i* 0 
ref]r$ to ! ,committee on ,ways &       
,means1 & 9 addition to ! ,committee on 
,education & ! ,work=ce1 = a p]iod to be
 subsequ5tly det]m9$ by ! ,speak]1 9 ea*
 case = consid]ation ( su* provisions z 
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to consolidate1 ) 
modifications1 ! ,hope ,s*ol>%ip ,cr$it1
 ! ,lifetime ,le>n+ ,cr$it1 & ! ,am]ican
 ,opportunity ,tax ,cr$it1 & = o!r      
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,college ,af=dability ,act 
( #bjac4  #b4 ,consolidation ( education
 cr$its ) modifications  7a7 ,9 g5]al   
,section #be;,a ( ! ,int]nal ,rev5ue    
,code ( #aihf is am5d$ to read z foll[s3
  #be;,a4 ,am]ican opportunity tax cr$it
  7a7 ,all[ance ( cr$it ,9 ! case ( an  
individual1 !re %all be all[$ z a cr$it 
aga9/ ! tax impos$ by ?is *apt] = !     

taxable ye> ! am\nt equal to #ajj p]c5t 
( s mu* ( ! qualifi$ tuition & relat$   
exp5ses paid by ! taxpay] dur+ ! taxable
 ye> 7= education furni%$ to ! eligible 
/ud5t dur+ any academic p]iod beg9n+ 9  
su* taxable ye>7 z does n exce$ #b1ejj4 
7b7 ,lifetime limitation on aggregate   
cr$it ,9 ! case ( qualifi$ tuition &    
relat$ exp5ses ) respect to any         
individual1 ! aggregate am\nt ( ! cr$its
 claim$ "u ?is section = all taxable    
ye>s %all n exce$ #aj1jjj1 det]m9$ )\t  
reg>d to :e!r-- 7#a7 su* cr$its are     
claim$ on ! return ( tax fil$ by !      
individual or by ano!r taxpay]1 or  7#b7
 su* exp5ses are treat$ z paid by !     
individual or by ano!r taxpay]4  7c7    
,limitation bas$ on modifi$ adju/$ gross
 income  7#a7 ,9 g5]al ,! am\nt :i* w\ld
 7b = ?is subsection7 be tak5 into      
acc\nt "u ?is section = ! taxable ye>   
%all be r$uc$ 7b n bel[ z]o7 by ! am\nt 
det]m9$ "u p>agraph 7#b74  7#b7 ,am\nt (
 r$uction ,! am\nt det]m9$ "u ?is       
p>agraph is ! am\nt :i* be>s ! same     

ratio to ! am\nt :i* w\ld be s tak5 into
 acc\nt z-- 7,a7 ! excess (-- 7i7 !     
taxpay]'s modifi$ adju/$ gross income = 
su* taxable ye>1 ov]  7ii7 #hj1jjj      
7twice su* am\nt 9 ! case ( a jo9t      
return71 be>s to  7,b7 #aj1jjj 7#bj1jjj 
9 ! case ( a jo9t return74  7#c7        
,modifi$ adju/$ gross income ,= purposes
 ( ?is subsection1 ! t]m modifi$ adju/$ 
gross income means ! adju/$ gross income
 ( ! taxpay] = ! taxable ye> increas$ by
 any am\nt exclud$ f gross income "u    
section #iaa1 #ica1 or #icc4  7d7 ,o!r  
limitations  7#a7 ,cr$it all[$ = ye>    
only if individual is at lea/  "t /ud5t 
= portion ( ye> ,! cr$it "u ?is section 
%all n be all[$ = a taxable ye> )       
respect to ! qualifi$ tuition & relat$  
exp5ses ( an individual unless su*      
individual is an eligible /ud5t = at    
lea/ "o academic p]iod :i* beg9s dur+   
su* ye>4  7#b7 ,d5ial ( cr$it if /ud5t  
convict$ ( a felony drug (f5se ,! cr$it 
"u subsection 7a7 %all n be all[$ =     
qualifi$ tuition & relat$ exp5ses = !   

enrollm5t or att5dance ( a /ud5t = any  
academic p]iod if su* /ud5t has be5     
convict$ ( a ,f$]al or ,/ate felony     
(f5se consi/+ ( ! possession or         
di/ribution ( a controll$ sub/ance be=e 
! end ( ! taxable ye> ) or )9 :i* su*   
p]iod ends4  7e7 ,def9itions ,= purposes
 ( ?is section3 7#a7 ,eligible /ud5t ,! 
t]m eligible /ud5t means1 ) respect to  
any academic p]iod1 a /ud5t :o-- 7,a7   
meets ! requirem5ts ( section           
#dhd7;a77#a7 ( ! ,high] ,education ,act 
( #aife 7#bj ,u4,s4,c4 #ajia7;a77#a771 z
 9 effect on ,augu/ #e1 #aiig1 &  7,b7  
is c>ry+ at lea/  ! normal full-"t "w   
load = ! c\rse ( /udy ! /ud5t is pursu+4
  7#b7 ,qualifi$ tuition & relat$       
exp5ses  7,a7 ,9 g5]al ,! t]m qualifi$  
tuition & relat$ exp5ses means tuition1 
fees1 & c\rse mat]ials requir$ = !      
enrollm5t or att5dance (-- 7i7 !        
taxpay]1  7ii7 ! taxpay]'s sp\se1 or    
7iii7 any dep5d5t ( ! taxpay] ) respect 
to :om ! taxpay] is all[$ a d$uction "u 
section #aea1  at an eligible           

educational in/itution = c\rses (       
in/ruction ( su* individual at su*      
in/itution4  7,b7 ,exception = education
 involv+ sports1 etc ,su* t]m does n    
include exp5ses ) respect to any c\rse  
or o!r education involv+ sports1 games1 
or hobbies1 unless su* c\rse or o!r     
education is "p ( ! individual's degree 
program4  7,c7 ,exception = nonacademic 
fees ,su* t]m does n include /ud5t      
activity fees1 a?letic fees1 insurance  
exp5ses1 or o!r exp5ses unrelat$ to an  
individual's academic c\rse (           
in/ruction4  7#c7 ,eligible educational 
in/itution ,! t]m eligible educational  
in/itution means an in/itution-- 7,a7   
:i* is describ$ 9 section #dha ( !      
,high] ,education ,act ( #aife1 z 9     
effect on ,augu/ #e1 #aiig1 &  7,b7 :i* 
is eligible to p>ticipate 9 a program "u
 title ,,iv ( su* ,act4  7f7 ,o!r       
limitations & special rules ,= purposes 
( ?is section3 7#a7 ,id5tification      
requirem5t ,no cr$it %all be all[$ "u   
?is section to a taxpay] ) respect to ! 

qualifi$ tuition & relat$ exp5ses ( an  
individual unless ! taxpay] includes !  
"n & taxpay] id5tification numb] ( su*  
individual on ! return ( tax = ! taxable
 ye>4  7#b7 ,adju/m5t = c]ta9 s*ol>%ips1
 etc  7,a7 ,9 g5]al ,! am\nt ( qualifi$ 
tuition & relat$ exp5ses o!rwise tak5   
into acc\nt "u ?is section ) respect to 
an individual = an academic p]iod %all  
be r$uc$ 7be=e ! application (          
subsections 7a7 & 7c77 by ! sum ( any   
am\nts paid = ! b5efit ( su* individual 
:i* are allocable to su* p]iod z-- 7i7 a
 qualifi$ s*ol>%ip :i* is excludable f  
gross income "u section #aag1  7ii7 an  
educational assi/ance all[ance "u *apt] 
#cj1 #ca1 #cb1 #cd1 or #ce ( title #ch1 
,unit$ ,/ates ,code1 or "u *apt] #afjf (
 title #aj1 ,unit$ ,/ates ,code1 &      
7iii7 a paym5t 7o!r ?an a gift1 beque/1 
devise1 or inh]itance )9 ! mean+ (      
section #ajb7;a77 = su* individual's    
educational exp5ses1 or attributable to 
su* individual's enrollm5t at an        
eligible educational in/itution1 :i* is 

excludable f gross income "u any law ( !
 ,unit$ ,/ates4  7,b7 ,coord9ation )    
pell grants n us$ = qualifi$ tuition &  
relat$ exp5ses ,any am\nt det]m9$ )     
respect to an individual "u subp>agraph 
7,a7 :i* is attributable to a ,f$]al    
,pell ,grant "u section #dja ( ! ,high] 
,education ,act ( #aife %all be r$uc$ 7b
 n bel[ z]o7 by ! am\nt ( ! exp5ses 7o!r
 ?an qualifi$ tuition & relat$ exp5ses7 
:i* are tak5 into acc\nt 9 det]m9+ ! co/
 ( att5dance 7z def9$ 9 section #dgb ( !
 ,high] ,education ,act ( #aife1 z 9    
effect on ! date ( ! enactm5t ( ?is     
subp>agraph7 ( su* individual at an     
eligible educational in/itution = !     
academic p]iod = :i* ! cr$it "u ?is     
section is be+ det]m9$4  7#c7 ,treatm5t 
( exp5ses paid by dep5d5t ,if a d$uction
 "u section #aea ) respect to an        
individual is all[$ to ano!r taxpay] = a
 taxable ye> beg9n+ 9 ! cal5d> ye> 9 :i*
 su* individual's taxable ye> beg9s--   
7,a7 no cr$it %all be all[$ "u ?is      
section to su* individual = su*         

individual's taxable ye>1 &  7,b7       
qualifi$ tuition & relat$ exp5ses paid  
by su* individual dur+ su* individual's 
taxable ye> %all be treat$ = purposes ( 
?is section z paid by su* o!r taxpay]4  
7#d7 ,treatm5t ( c]ta9 prepaym5ts ,if   
qualifi$ tuition & relat$ exp5ses are   
paid by ! taxpay] dur+ a taxable ye> =  
an academic p]iod :i* beg9s dur+ ! fir/ 
#c mon?s foll[+ su* taxable ye>1 su*    
academic p]iod %all be treat$ = purposes
 ( ?is section z beg9n+ dur+ su* taxable
 ye>4  7#e7 ,d5ial ( d\ble b5efit ,no   
cr$it %all be all[$ "u ?is section = any
 exp5se = :i* a d$uction is all[$ "u any
 o!r provision ( ?is *apt]4  7#f7 ,no   
cr$it = m>ri$ individuals fil+ sep>ate  
returns ,if ! taxpay] is a m>ri$        
individual 7)9 ! mean+ ( section #ggjc71
 ?is section %all apply only if !       
taxpay] & ! taxpay]'s sp\se file a jo9t 
return = ! taxable ye>4  7#g7           
,nonresid5t ali5s ,if ! taxpay] is a    
nonresid5t ali5 individual = any portion
 ( ! taxable ye>1 ?is section %all apply

 only if su* individual is treat$ z a   
resid5t ali5 ( ! ,unit$ ,/ates =        
purposes ( ?is *apt] by reason ( an     
election "u subsection 7g7 or 7h7 (     
section #fjac4  7g7 ,portion ( cr$it    
refundable  7#a7 ,9 g5]al #hj p]c5t ( ! 
am\nt :i* w\ld 7b = ?is subsection &    
section #bf7 be all[$ z a cr$it all[$ "u
 ?is section = ! taxable ye> %all be    
treat$ z a cr$it all[able "u subp>t ,c  
7& n all[$ "u ?is section74 ,! prec$+   
s5t5ce %all n apply to any taxpay] = any
 taxable ye> if su* taxpay] is a *ild to
 :om subsection 7g7 ( section #a applies
 = su* taxable ye>4  7#b7 ,maximum am\nt
 refundable ,! am\nt treat$ by p>agraph 
7#a7 z a cr$it all[able "u subp>t ,c =  
any taxable ye> %all n exce$ #a1ejj4    
7h7 ,inflation adju/m5ts  7#a7 ,9 g5]al 
,9 ! case ( taxable ye>s beg9n+ aft]    
#bjad1 ! #b1ejj & #c1jjj am\nts 9       
subsection 7a71 ! #aj1jjj am\nt 9       
subsection 7b71 ! #hj1jjj am\nt 9       
subsection 7c77#b77;,a77ii71 & ! #a1ejj 
9 subsection 7g77#b7 %all ea* be        

increas$ by an am\nt equal to-- 7,a7 su*
 doll> am\nt1 multipli$ by  7,b7 !      
co/-(-liv+ adju/m5t det]m9$ "u section  
#a7;f77#c7 = ! cal5d> ye> 9 :i* !       
taxable ye> beg9s1 det]m9$ by sub/itut+ 
cal5d> ye> #bjac = cal5d> ye> #aiib 9   
subp>agraph 7,b7 !re(4  7#b7 ,r\nd+     
7,a7 ,9 g5]al ,if ! #a1ejj1 #b1ejj1     
#c1jjj1 or #aj1jjj am\nt z adju/$ "u    
p>agraph 7#a7 is n a multiple ( #ajj1   
su* am\nt %all be r\nd$ to ! next l[e/  
multiple ( #ajj4  7,b7 #hj1jjj am\nt ,if
 ! #hj1jjj am\nt z adju/$ "u p>agraph   
7#a7 is n a multiple ( #a1jjj1 su* am\nt
 %all be r\nd$ to ! next l[e/ multiple (
 #a1jjj4  7i7 ,election n ,to h section 
apply ,a taxpay] may elect n to h ?is   
section apply ) respect to ! qualifi$   
tuition & relat$ exp5ses ( an individual
 = any taxable ye>4  7j7 ,regulations ,!
 ,secret>y may prescribe su* regulations
 z may be necess>y or appropriate to    
c>ry out ?is section1 includ+           
regulations provid+ = a recapture ( !   
cr$it all[$ "u ?is section 9 cases :]e  

!re is a refund 9 a subsequ5t taxable   
ye> ( any am\nt :i* 0 tak5 into acc\nt 9
 det]m9+ ! am\nt ( su* cr$it4  7k7      
,pilot program ,to make p]iodic paym5ts 
z college exp5ses incurr$  7#a7 ,9 g5]al
 ,! ,secret>y ( ! ,treasury & !         
,secret>y ( ,education %all jo9tly      
e/abli% a program design$ to make       
paym5ts p]iodically to or on behalf ( an
 eligible /ud5t z ! /ud5t incurs        
qualifi$ exp5ses dur+ ! taxable ye>4 ,! 
total am\nt t may be s paid to or on    
behalf ( an eligible /ud5t ?r\gh ?is    
program %all n exce$ ! cr$it :i* w\ld 7b
 = p>agraph 7#b77 be all[able "u ?is    
section if subsection 7c7 7 appli$ by   
us+ ! taxpay]'s modifi$ adju/$ gross    
income = ! prec$+ taxable ye>4  7#b7    
,cr$it r$uc$ by pilot program paym5ts ,!
 cr$it all[able "u ?is section 7)\t     
reg>d to ?is p>agraph7 = any taxable ye>
 %all be r$uc$ 7b n bel[ z]o7 by !      
paym5ts made ) respect to a /ud5t "u    
p>agraph 7#a7 = exp5ses :i* w\ld o!rwise
 be tak5 into acc\nt 9 det]m9+ ! cr$it  

"u ?is section = su* ye>4  7#c7 ,program
 p>ticipation ,p>ticipation 9 ! program 
e/abli%$ "u ?is subsection %all be      
volunt>y ) respect to bo? /ud5ts &      
educational in/itutions2 except t1      
in/itutions :i* are taxable "u ?is *apt]
 7o!r ?an by reason ( section #eaa7 may 
n p>ticipate 9 su* program4  7#d7       
,program p]iod ,! program e/abli%$ "u   
?is subsection %all apply to exp5ses =  
academic p]iods beg9n+ dur+ ! #e-ye>    
p]iod :i* beg9s on ! date :i* is #a ye> 
aft] ! date ( ! enactm5t ( ?is          
subsection4  7#e7 ,paym5ts n treat$ z   
res\rces = f9ancial aid ,paym5ts made "u
 ?is subsection %all n be treat$ z      
res\rces = purposes ( det]m9+ ! am\nt ( 
any f9ancial aid :i* is fund$ 9 :ole or 
"p ) ,f$]al funds4 ,paym5ts "u ! program
 %all n be made 9 a mann] t w\ld r$uce !
 ,/ate1 private1 or in/itutional aid    
available to an eligible /ud5t4  7#f7   
,notice ( program ,educational          
in/itutions p>ticipat+ 9 ! program      
e/abli%$ "u ?is subsection %all provide 

appropriate notices to p>5ts & /ud5ts ( 
! option ( paym5ts "u su* program4 ,su* 
notices %all n be consid]$ tax advice = 
purposes ( any ,f$]al law or regulation4
  7#g7 ,report+ ,! ,secret>y ( !        
,treasury & ! ,secret>y ( ,education    
%all jo9tly submit annual reports to    
,congress on ! program e/abli%$ "u ?is  
subsection1 toge!r ) any recomm5dations 
) respect to su* program4  4  7b7       
,cl]ical am5dm5t ,! item relat+ to      
section #be;,a 9 ! table ( sections =   
subp>t ,a ( "p ,,iv ( sub*apt] ,a (     
*apt] #a ( su* ,code is am5d$ to read z 
foll[s3  ,sec4 #be;,a4 ,am]ican         
,opportunity ,tax ,cr$it4  4  7c7       
,con=m+ am5dm5ts  7#a7 ,subp>agraph 7,b7
 ( section #gb7t77#g7 ( su* ,code is    
am5d$ by /rik+ #be;,a7g77#b7 & ins]t+   
#be;,a7f77#b74  7#b7 ,p>agraph 7#b7 (   
section #bba7;d7 ( su* ,code is am5d$-- 
7,a7 by /rik+ #be;,a7g77#b7 9           
subp>agraph 7,b7 & ins]t+ #be;,a7f77#b71
 &  7,b7 by /rik+ #be;,a7f77#b7 & ins]t+
 #be;,a7e77#c74  7#c7 ,p>agraph 7#c7 (  

section #bba7;d7 ( su* ,code is am5d$ by
 /rik+ #be;,a7b77#c7 & ins]t+           
#be;,a7e77#a74  7#d7 ,p>agraph 7#a7 (   
section #bbb7;d7 ( su* ,code is am5d$-- 
7,a7 by /rik+ #be;,a7f7 & ins]t+        
#be;,a7e77#b71 &  7,b7 by /rik+         
#be;,a7g77#b7 & ins]t+ #be;,a7f77#b74   
7#e7 ,clause 7v7 ( section              
#ebi7;c77#c77;,b7 ( su* ,code is am5d$--
 7,a7 by /rik+ #be;,a7g77#b7 9 subclause
 7,i7 & ins]t+ #be;,a7f77#b71 &  7,b7 by
 /rik+ ,hope & ,lifetime ,le>n+ cr$its 9
 ! head+ & ins]t+ ,am]ican ,opportunity 
,tax ,cr$it4  7#f7 ,clause 7i7 ( section
 #ebi7;e77#c77;,b7 ( su* ,code is am5d$ 
by /rik+ #be;,a7b77#c7 & ins]t+         
#be;,a7e77#a74  7#g7 ,subp>agraph 7,c7 (
 section #ecj7;d77#b7 ( su* ,code is    
am5d$-- 7,a7 by /rik+ #be;,a7g77#b7 9   
clause 7i77,i7 & ins]t+ #be;,a7f77#b71 &
  7,b7 by /rik+ ,hope & ,lifetime ,le>n+
 cr$its 9 ! head+ & ins]t+ ,am]ican     
,opportunity ,tax ,cr$it4  7#h7 ,clause 
7iii7 ( section #ecj7;d77#d77;,b7 ( su* 
,code is am5d$ by /rik+ #be;,a7g77#b7 & 

ins]t+ #be;,a7f77#b74  7#i7 ,section    
#adjj,o ( su* ,code is am5d$-- 7,a7 by  
/rik+ #be;,a7f77#b7 & ins]t+            
#be;,a7e77#c71  7,b7 by ins]t+ 7z 9     
effect on ! date ( ! enactm5t ( ?is     
section7 aft] #be;,a7b77#a7 9 p>agraph  
7#b71 &  7,c7 by ins]t+ 7z 9 effect on !
 date ( ! enactm5t ( ?is section7 aft]  
#be;,a7c77#a7 9 p>agraph 7#c74  7#aj7   
,subsection 7e7 ( section #fjej,s ( su* 
,code is am5d$ by /rik+ subsection      
7g77#b7 & ins]t+ subsection 7f77#b74    
7#aa7 ,subp>agraph 7,a7 ( section       
#fbaa7;b77#d7 ( su* ,code is am5d$ by   
/rik+ subsection 7i77#f7 & ins]t+       
subsection 7g74  7#ab7 ,subp>agraph 7,j7
 ( section #fbac7;g77#b7 ( su* ,code is 
am5d$ by /rik+ #be;,a7g77#a7 & ins]t+   
#be;,a7f77#a74  7d7 ,effective date ,!  
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjac4  #c4 ,expansion ( pell grant
 exclusion f gross income  7a7 ,9 g5]al 
,p>agraph 7#a7 ( section #aag7;b7 ( !   
,int]nal ,rev5ue ,code ( #aihf is am5d$ 

by /rik+ receiv$ by an individual & all 
t foll[s & ins]t+ receiv$ by an         
individual-- 7,a7 z a s*ol>%ip or       
fell[%ip grant to ! ext5t ! individual  
e/abli%es t1 9 accordance ) ! conditions
 ( ! grant1 su* am\nt 0 us$ = qualifi$  
tuition & relat$ exp5ses1 or  7,b7 z a  
,f$]al ,pell ,grant "u section #dja ( ! 
,high] ,education ,act ( #aife 7#bj     
,u4,s4,c4 #ajgj;a7 7z 9 effect on ! date
 ( ! enactm5t ( ?is subp>agraph74  4    
7b7 ,effective date ,! am5dm5t made by  
?is section %all apply to taxable ye>s  
beg9n+ aft] ,decemb] #ca1 #bjac4  #d4   
,increas$ public aw>5ess ( am]ican      
opportunity tax cr$it ,! ,secret>y ( !  
,treasury1 or ! ,secret>y's delegate1 9 
consultation ) ! ,secret>y ( ,education1
 %all e/abli% a taxpay] aw>5ess program 
to in=m ! taxpay+ public ( !            
availability ( ! ,am]ican ,opportunity  
,tax ,cr$it all[$ "u section #be;,a ( ! 
,int]nal ,rev5ue ,code ( #aihf4 ,su*    
public aw>5ess program %all be design$  
to assure t individuals :o may be       

eligible are in=m$ ( ! availability (   
su* cr$it & fil+ proc$ures4 ,! ,secret>y
 %all use appropriate means (           
communication to c>ry out ! provisions (
 ?is section4 ,! taxpay] aw>5ess program
 %all include1 b n be limit$ to1 prom95t
 display ( in=mation ab\t ! availability
 ( ! ,am]ican ,opportunity ,tax ,cr$it  
on in=mation return =ms specifi$ by su* 
,secret>y = use by educational          
in/itutions to report qualifi$ tuition &
 relat$ exp5ses incurr$4