HR 1954 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to make higher education more affordable by providing a full tax deduction for higher education expenses and interest on student loans.CommentsClose CommentsPermalink

April 2, 2009CommentsClose CommentsPermalink

Mr. PAUL (for himself and Mr. MILLER of Florida) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to make higher education more affordable by providing a full tax deduction for higher education expenses and interest on student loans.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Make College Affordable Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

(a) Deduction Allowed- Section 221 of the Internal Revenue Code of 1986 is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 221. HIGHER EDUCATION EXPENSES.

‘(a) Allowance of Deduction- In the case of an individual, there shall be allowed as a deduction an amount equal to the sum of--CommentsClose CommentsPermalink





‘(1) the qualified higher education expenses, plusCommentsClose CommentsPermalink





‘(2) interest on qualified education loans,CommentsClose CommentsPermalink





paid by the taxpayer during the taxable year.CommentsClose CommentsPermalink





‘(b) Qualified Higher Education Expenses- For purposes of this section--CommentsClose CommentsPermalink





‘(1) QUALIFIED HIGHER EDUCATION EXPENSES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified higher education expenses’ means--CommentsClose CommentsPermalink





‘(i) tuition and fees charged by an educational institution and required for the enrollment or attendance of--CommentsClose CommentsPermalink





‘(I) the taxpayer,CommentsClose CommentsPermalink





‘(II) the taxpayer’s spouse,CommentsClose CommentsPermalink





‘(III) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, orCommentsClose CommentsPermalink





‘(IV) any grandchild of the taxpayer,CommentsClose CommentsPermalink





as an eligible student at an institution of higher education, andCommentsClose CommentsPermalink





‘(ii) reasonable living expenses for such an individual while away from home and attending such institution.CommentsClose CommentsPermalink





‘(B) ELIGIBLE COURSES- Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses--CommentsClose CommentsPermalink





‘(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, andCommentsClose CommentsPermalink





‘(ii) are not attributable to any graduate program of such individual.CommentsClose CommentsPermalink





‘(C) ELIGIBLE STUDENT- For purposes of subparagraph (A), the term ‘eligible student’ means a student who--CommentsClose CommentsPermalink





‘(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, andCommentsClose CommentsPermalink





‘(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education.CommentsClose CommentsPermalink





‘(2) INSTITUTION OF HIGHER EDUCATION- The term ‘institution of higher education’ is as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001).CommentsClose CommentsPermalink





‘(c) Qualified Education Loan- For purposes of this section--CommentsClose CommentsPermalink





‘(1) IN GENERAL- The term ‘qualified education loan’ means a loan which is--CommentsClose CommentsPermalink





‘(A) made, insured, or guaranteed by the Federal Government,CommentsClose CommentsPermalink





‘(B) made by a State or a political subdivision of a State,CommentsClose CommentsPermalink





‘(C) made from the proceeds of a qualified student loan bond under section 144(b), orCommentsClose CommentsPermalink





‘(D) made by an institution of higher education.CommentsClose CommentsPermalink





‘(2) LIMITATION- The amount of interest on a qualified education loan which is taken into account under subsection (a)(2) shall not exceed the amount which bears the same ratio to such amount of interest as--CommentsClose CommentsPermalink





‘(A) the proceeds from such loan used for qualified higher education expenses, bears toCommentsClose CommentsPermalink





‘(B) the total proceeds from such loan.CommentsClose CommentsPermalink





For purposes of the preceding sentence, the term ‘qualified higher education expenses’ shall be determined without regard to subsection (c)(1)(A)(i)(IV).CommentsClose CommentsPermalink





‘(d) Special Rules-CommentsClose CommentsPermalink





‘(1) NO DOUBLE BENEFIT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision.CommentsClose CommentsPermalink





‘(B) DENIAL OF DEDUCTION IF CREDIT ELECTED- No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year.CommentsClose CommentsPermalink





‘(C) DEPENDENTS- No deduction shall be allowed under subsection (a) to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.CommentsClose CommentsPermalink





‘(D) COORDINATION WITH EXCLUSIONS- A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year.CommentsClose CommentsPermalink





‘(2) LIMITATION ON TAXABLE YEAR OF DEDUCTION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year.CommentsClose CommentsPermalink





‘(B) CERTAIN PREPAYMENTS ALLOWED- Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year.CommentsClose CommentsPermalink





‘(3) ADJUSTMENT FOR CERTAIN SCHOLARSHIPS AND VETERANS BENEFITS- The amount of qualified higher education expenses otherwise taken into account under subsection (a) or (d)(2) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as--CommentsClose CommentsPermalink





‘(A) a qualified scholarship which under section 117 is not includable in gross income,CommentsClose CommentsPermalink





‘(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, orCommentsClose CommentsPermalink





‘(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States.CommentsClose CommentsPermalink





‘(4) NO DEDUCTION FOR MARRIED INDIVIDUALS FILING SEPARATE RETURNS- If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.CommentsClose CommentsPermalink





‘(5) NONRESIDENT ALIENS- If the taxpayer is a nonresident alien individual for any portion of the taxable year, 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 (g) or (h) of section 6013.CommentsClose CommentsPermalink





‘(6) REGULATIONS- The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.’.CommentsClose CommentsPermalink





(b) Deduction Allowed in Computing Adjusted Gross Income- Paragraph (17) of section 62(a) of such Code is amended to read as follows:CommentsClose CommentsPermalink





‘(17) HIGHER EDUCATION EXPENSES- The deduction allowed by section 221.’.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) Part VII of subchapter B of chapter 1 of such Code is amended--CommentsClose CommentsPermalink





(A) by striking section 222, andCommentsClose CommentsPermalink





(B) in the table of sections for such part by striking the item relating to section 222.CommentsClose CommentsPermalink





(2) The following sections of such Code are each amended by striking ‘222,’: sections 86(b)(2)(A), 135(c)(4)(A), 137(b)(3)(A), 199(d)(2)(A), and 219(g)(3)(A)(ii).CommentsClose CommentsPermalink





(3) Section 469(i)(3)(F)(iii) of such Code is amended by striking ‘221, and 222’ and inserting ‘and 221’.CommentsClose CommentsPermalink





(4) Section 6050S(e) of such Code is amended by striking ‘section 221(d)(1)’ and inserting ‘section 221(c)(1)’.CommentsClose CommentsPermalink





(5) The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 221 and inserting the following new item:CommentsClose CommentsPermalink





‘Sec. 221. Higher education expenses.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to payments made after December 31, 2008.CommentsClose CommentsPermalink