S. 2462 — Introduced in Senate

II 114th CONGRESS 2d Session S. 2462 IN THE SENATE OF THE UNITED STATES January 21, 2016 Mr. Blumenthal introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend section 117 of the Internal Revenue Code of 1986 to exclude Federal student aid from taxable gross income. 1. Short title This Act may be cited as the Make Student Grants Truly Tax-Free Act. 2. Expansion of qualified scholarship exclusion from gross income (a) In general Paragraph (1) of section 117(b) of the Internal Revenue Code of 1986 is amended— (1) by striking received by an individual as a scholarship and inserting received by an individual— (A) as a scholarship , (2) by striking the period at the end and inserting a comma, and (3) by adding at the end the following new subparagraphs: (B) through a scholarship or fellowship grant program administered by the Secretary of Education that is based on financial need, including a Federal Pell Grant under section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a), (C) as an Iraq and Afghanistan Service Grant under section 420R of the Higher Education Act of 1965 (20 U.S.C. 1070h), or (D) as a TEACH Grant under subpart 9 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070g et seq.). . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.