,i #aacth ,,congress #ast ,session ,h4 ,r4 #cdgf ,,in ,,the ,,house ,,of ,,representatives ,november #ac1 #bjac,mr4 ,israel introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to extend and modify the ,american ,opportunity ,tax ,credit1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,middle ,class ,college ,tuition ,tax ,credit ,expansion ,act4 #b4 ,extension and modification of ,american ,opportunity ,tax ,credit 7a7 ,in general ,section #be;,a of the ,internal ,revenue ,code of #aihf is amended to read as follows3 #be;,a4 ,american ,opportunity ,tax ,credit 7a7 ,allowance of credit ,in the case of an individual who is an eligible student for any taxable year1 there shall be allowed as a credit against the tax imposed by this chapter for such taxable year the amount determined under subsection 7b7 with respect to such individual4 7b7 ,amount of credit 7#a7 ,student enrolled at least #a_/b time ,in the case of an eligible student who is carrying at least #a_/b the normal full-time workload for the course of study the student is pursuing1 the amount determined under this subsection with respect to such individual is the sum of-- 7,a7 #ajj percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year 7for education furnished to the eligible student during any academic period beginning in such taxable year7 as does not exceed #b1ejj1 plus 7,b7 #ej percent of such expenses so paid as exceeds #b1ejj but does not exceed #g1ejj4 7#b7 ,other students ,in the case of an eligible student not described in paragraph 7#a71 the amount determined under this subsection with respect to such individual is #ej percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year 7for education furnished to the eligible student during any academic period beginning in such taxable year7 as does not exceed #aj1jjj4 7c7 ,dollar limitations 7#a7 ,limitation based on modified adjusted gross income 7,a7 ,in general ,the amount which would 7but for this paragraph7 be taken into account under this section for the taxable year shall be reduced 7but not below zero7 by the amount determined under paragraph 7#b74 7,b7 ,amount of reduction ,the amount determined under this paragraph is the amount which bears the same ratio to the amount which would be so taken into account as-- 7i7 the excess of-- 7,i7 the taxpayer's modified adjusted gross income for such taxable year1 over 7,,ii7 #afj1jjj 7twice such amount in the case of a joint return71 bears to 7ii7 #bj1jjj 7#dj1jjj in the case of a joint return74 7,c7 ,modified adjusted gross income ,for purposes of this paragraph1 the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc4 7,d7 ,inflation adjustment ,in the case of any taxable year beginning after #bjad1 the #afj1jjj amount in subparagraph 7,b77i77,,ii7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjac for calendar year #aiib in subparagraph 7,b7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the nearest multiple of #a1jjj4 7#b7 ,limitation based on amount of tax ,the credit allowed under this section shall not exceed the excess of-- 7,a7 the sum of the regular tax liability 7as defined in section #bf7;b77 plus the tax imposed by section #ee1 over 7,b7 the sum of the credits allowable under this subpart 7other than this subsection and sections #bc1 #be;,d1 and #cj;,d7 and section #bg for the taxable year4 7d7 ,other limitations and special rules ,for purposes of this section3 7#a7 ,lifetime dollar limitation ,in the case of qualified tuition and related expenses with respect to any individual1 the aggregate amount of the credits claimed under this section for all taxable years shall not exceed #be1jjj1 determined without regard to whether-- 7,a7 such credits are claimed on the return of tax filed by the individual or by another taxpayer1 or 7,b7 such expenses are treated as paid by the individual or by another taxpayer4 7#b7 ,reporting ,no credit shall be allowed under this section to a taxpayer with respect to the qualified tuition and related expenses of an eligible student unless the taxpayer includes the name and taxpayer identification number of such eligible student on the return of tax for the taxable year4 7#c7 ,adjustment for certain scholarships1 etc 7,a7 ,in general ,the amount of qualified tuition and related expenses otherwise taken into account under this section with respect to an individual for an academic period shall be reduced 7before the application of subsections 7b7 and 7c77 by the sum of any amounts paid for the benefit of such individual which are allocable to such period as-- 7i7 a qualified scholarship which is excludable from gross income under section #aag1 7ii7 an educational assistance allowance under chapter #cj1 #ca1 #cb1 #cd1 or #ce of title #ch1 ,united ,states ,code1 or under chapter #afjf of title #aj1 ,united ,states ,code1 and 7iii7 a payment 7other than a gift1 bequest1 devise1 or inheritance within the meaning of section #ajb7;a77 for such individual's educational expenses1 or attributable to such individual's enrollment at an eligible educational institution1 which is excludable from gross income under any law of the ,united ,states4 7,b7 ,coordination with ,pell ,grants not used for qualified tuition and related expenses ,any amount determined with respect to an individual under subparagraph 7,a7 which is attributable to a ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife shall be reduced 7but not below zero7 by the amount of the expenses 7other than qualified tuition and related expenses7 which are taken into account in determining the cost of attendance 7as defined in section #dgb of the ,higher ,education ,act of #aife1 as in effect on the date of the enactment of the ,middle ,class ,college ,tuition ,tax ,credit ,expansion ,act7 of such individual at an eligible educational institution for the academic period for which the credit under this section is being determined4 7#d7 ,treatment of expenses paid by dependent ,if a deduction under section #aea with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins-- 7,a7 no credit shall be allowed under this section to such individual for such individual's taxable year1 and 7,b7 qualified tuition and related expenses paid by such individual during such individual's taxable year shall be treated for purposes of this section as paid by such other taxpayer4 7#e7 ,treatment of certain prepayments ,if qualified tuition and related expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first #c months following such taxable year1 such academic period shall be treated for purposes of this section as beginning during such taxable year4 7#f7 ,denial of double benefit ,no credit shall be allowed under this section for any expense for which a deduction is allowed under any other provision of this chapter4 7#g7 ,no credit for married individuals filing separate returns ,if the taxpayer is a married individual 7within the meaning of section #ggjc71 this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year4 7#h7 ,nonresident aliens ,if the taxpayer is a nonresident alien individual for any portion of the taxable year1 this section shall apply only if such individual is treated as a resident alien of the ,united ,states for purposes of this chapter by reason of an election under subsection 7g7 or 7h7 of section #fjac4 7e7 ,election not ,to have section apply ,a taxpayer may elect not to have this section apply with respect to the qualified tuition and related expenses of an individual for any taxable year4 7f7 ,definitions ,for purposes of this section3 7#a7 ,eligible student ,the term eligible student means1 with respect to any taxable year1 an individual who-- 7,a7 is enrolled for at least one academic period which begins during such taxable year at an eligible educational institution1 and 7,b7 meets the requirements of section #dhd7;a77#a7 of the ,higher ,education ,act of #aife1 as in effect on the date of the enactment of the ,middle ,class ,college ,tuition ,tax ,credit ,expansion ,act4 7#b7 ,qualified tuition and related expenses 7,a7 ,in general ,the term qualified tuition and related expenses means tuition1 fees1 and course materials required for the enrollment or attendance of-- 7i7 the taxpayer1 7ii7 the taxpayer's spouse1 or 7iii7 any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section #aea1 at an eligible educational institution for courses of instruction of such individual at such institution4 7,b7 ,exception for education involving sports1 etc ,such term does not include expenses with respect to any course or other education involving sports1 games1 or hobbies1 unless such course or other education is part of the individual's degree program4 7,c7 ,exception for nonacademic fees ,such term does not include student activity fees1 athletic fees1 insurance expenses1 or other expenses unrelated to an individual's academic course of instruction4 7,d7 ,computer technology and equipment ,such term includes expenses for the purchase of computer technology or equipment 7as defined in section #agj7;e77#f77;,f77i771 or ,internet access and related services1 only to the extent the purchase of such technology1 equipment1 or services is specifically required by the individual's academic course of instruction or degree program4 7#c7 ,eligible educational institution ,the term eligible educational institution means an institution-- 7,a7 which is described in section #dha of the ,higher ,education ,act of #aife1 as in effect on the date of the enactment of the ,middle ,class ,college ,tuition ,tax ,credit ,expansion ,act1 and 7,b7 which is eligible to participate in a program under title ,,iv of such ,act4 7g7 ,portion of credit refundable ,fifty percent of the credit allowed under this section 7determined after application of subsections 7c77#a7 and 7d7 and without regard to this subsection and subsection 7c77#b71 as the case may be7 shall be treated as a credit allowable under subpart ,c 7and not allowed under this section74 ,the preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection 7g7 of section #a applies for such taxable year4 7h7 ,regulations ,the ,secretary may prescribe such regulations as may be necessary or appropriate to carry out this section1 including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit4 4 7b7 ,clerical amendment ,the item relating to section #be;,a in the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended to read as follows3 ,sec4 #be;,a4 ,american ,opportunity ,tax ,credit4 4 7c7 ,conforming amendments 7#a7 ,subparagraph 7,b7 of section #gb7t77#g7 of such ,code is amended by striking #be;,a7g77#b7 and inserting #be;,a7d77#c74 7#b7 ,paragraph 7#b7 of section #bba7;d7 of such ,code is amended-- 7,a7 by striking #be;,a7g77#b7 in subparagraph 7,b7 and inserting #be;,a7d77#c71 and 7,b7 by striking #be;,a7f77#b7 and inserting #be;,a7f77#c74 7#c7 ,paragraph 7#c7 of section #bba7;d7 of such ,code is amended by striking #be;,a7b77#c7 and inserting #be;,a7f77#a7 7but only with respect to a student who is carrying at least #a_/b the normal full-time workload for the course of study the student is pursuing74 7#d7 ,clause 7v7 of section #ebi7;c77#c77;,b7 of such ,code is amended-- 7,a7 by striking #be;,a7g77#b7 in subclause 7,i7 and inserting #be;,a7d77#c71 and 7,b7 by striking ,hope and ,lifetime ,learning credits in the heading and inserting ,american ,opportunity ,credit4 7#e7 ,clause 7i7 of section #ebi7;e77#c77;,b7 of such ,code is amended by striking #be;,a7b77#c7 and inserting #be;,a7f77#a7 7but only with respect to a student who is carrying at least #a_/b the normal full-time workload for the course of study the student is pursuing74 7#f7 ,subparagraph 7,c7 of section #ecj7;d77#b7 of such ,code is amended-- 7,a7 by striking #be;,a7g77#b7 in clause 7i77,i7 and inserting #be;,a7d77#c71 and 7,b7 by striking ,hope and ,lifetime ,learning credits in the heading and inserting ,american ,opportunity ,credit4 7#g7 ,clause 7iii7 of section #ecj7;d77#d77;,b7 of such ,code is amended by striking #be;,a7g77#b7 and inserting #be;,a7d77#c74 7#h7 ,section #adjj,o of such ,code is amended-- 7,a7 by striking #be;,a7f77#b7 and inserting #be;,a7f77#c71 7,b7 by inserting 7as in effect on the date of the enactment of this section7 after #be;,a7b77#a7 in paragraph 7#b71 and 7,c7 by inserting 7as in effect on the date of the enactment of this section7 after #be;,a7c77#a7 in paragraph 7#c74 7#i7 ,subsection 7e7 of section #fjej,s of such ,code is amended by striking subsection 7g77#b7 and inserting subsection 7d77#c74 7#aj7 ,subparagraph 7,a7 of section #fbaa7;b77#d7 of such ,code is amended by striking subsection 7i77#f7 and inserting subsection 7g74 7#aa7 ,subparagraph 7,j7 of section #fbac7;g77#b7 of such ,code is amended by striking #be;,a7g77#a7 and inserting #be;,a7d77#b74 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #c4 ,expansion of ,pell ,grant exclusion from gross income 7a7 ,in general ,paragraph 7#a7 of section #aag7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking received by an individual and all that follows and inserting received by an individual-- 7,a7 as a scholarship or fellowship grant to the extent the individual establishes that1 in accordance with the conditions of the grant1 such amount was used for qualified tuition and related expenses1 or 7,b7 as a ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife 7as in effect on the date of the enactment of the ,middle ,class ,college ,tuition ,tax ,credit ,expansion ,act74 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4