American Opportunity Student Tax Relief Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6749 To amend the Internal Revenue Code of 1986 to extend and modify the American Opportunity Tax Credit, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 8, 2020 Mr. DOGGETT (for himself, Mr. FITZPATRICK, Mr. DANNY K. DAVIS of Illi- nois, Mr. BEYER, Mr. BISHOP of Georgia, Mrs. BEATTY, Mr. COHEN, Mr. CLAY, Mr. RUSH, Mr. TONKO, Ms. NORTON, Mr. THOMPSON of Mis- sissippi, Mr. GREEN of Texas, Mr. VEASEY, Ms. ROYBAL-ALLARD, Mrs. WATSON COLEMAN, Mrs. CAROLYN B. MALONEY of New York, Mr. PAS- CRELL, Ms. KAPTUR, Ms. ESHOO, Ms. LEE of California, Ms. DELBENE, Mr. CASTRO of Texas, Mr. RASKIN, Mr. TAKANO, Mr. KRISHNAMOORTHI, Mr. LOWENTHAL, Mr. SUOZZI, Ms. SEWELL of Alabama, Mr. RYAN, Mr. PANETTA, Ms. JAYAPAL, Mrs. HAYES, Ms. SCHAKOWSKY, Ms. SA´NCHEZ, Mr. CICILLINE, Mr. LARSON of Connecticut, Mr. HIGGINS of New York, Mr. SWALWELL of California, and Ms. JUDY CHU of California) intro- duced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to extend and modify the American Opportunity Tax Credit, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6749 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘American Opportunity 2 Student Tax Relief Act of 2020’’. 3 SEC. 2. COVID RELIEF. 4 (a) AMERICAN OPPORTUNITY AND LIFETIME LEARN- 5 ING CREDITS.—Section 25A of the Internal Revenue Code 6 of 1986 is amended by adding at the end the following 7 new subsection: 8 ‘‘(j) COVID RELIEF.—In the case of any taxable 9 year beginning in 2020: 10 ‘‘(1) Subsection (b)(1)(A) shall be applied by 11 substituting ‘$2,500’ for ‘$2,000’. 12 ‘‘(2) Subsection (b)(1)(B) shall be applied— 13 ‘‘(A) by substituting ‘$2,500’ for ‘$2,000’, 14 and 15 ‘‘(B) by substituting ‘$4,500’ for ‘$4,000’. 16 ‘‘(3) Subsection (i) shall be applied by sub- 17 stituting ‘Sixty percent’ for ‘Forty percent’. 18 ‘‘(4) The amount determined under subsection 19 (c)(1) shall be the sum of— 20 ‘‘(A) 100 percent of so much of the quali- 21 fied tuition and related expenses paid the tax- 22 payer during the taxable year (for education 23 furnished during any academic period beginning 24 in such taxable year) as does not exceed 25 $2,000, plus 26 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6749 IH ‘‘(B) 20 percent of such expenses so paid 1 as exceeds $2,000 but does not exceed $10,000. 2 ‘‘(5) So much of the credit allowable under sub- 3 section (a) as is attributable to the Lifetime Learn- 4 ing Credit (determined after application of sub- 5 section (d) and without regard to this paragraph 6 and section 26(a)) and does not exceed $1,500 shall 7 be treated as a credit allowable under subpart C 8 (and not allowed under subsection (a)).’’. 9 (b) EXPANSION OF PELL GRANT EXCLUSION FROM 10 GROSS INCOME.—Section 4(b) of this Act is amended by 11 striking ‘‘December 31, 2020’’ and inserting ‘‘December 12 31, 2019’’. 13 (c) EXCLUSION OF EMERGENCY FINANCIAL AID 14 GRANTS.—For purposes of the Internal Revenue Code of 15 1986, in the case of any taxable year beginning in 2020, 16 gross income shall not include any emergency financial aid 17 grant received by a student under section 18004(c) of the 18 CARES Act. 19 SEC. 3. EXTENSION AND MODIFICATION OF AMERICAN OP- 20 PORTUNITY TAX CREDIT. 21 (a) IN GENERAL.—Section 25A of the Internal Rev- 22 enue Code of 1986, as amended by section 2, is amended 23 to read as follows: 24 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6749 IH ‘‘SEC. 25A. AMERICAN OPPORTUNITY TAX CREDIT. 1 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in- 2 dividual who is an eligible student for any taxable year, 3 there shall be allowed as a credit against the tax imposed 4 by this chapter for such taxable year the amount deter- 5 mined under subsection (b) with respect to such indi- 6 vidual. 7 ‘‘(b) AMOUNT OF CREDIT.— 8 ‘‘(1) STUDENT ENROLLED AT LEAST 1⁄2 TIME.— 9 In the case of an eligible student who is carrying at 10 least 1⁄2 the normal full-time workload for the course 11 of study the student is pursuing, the amount deter- 12 mined under this subsection with respect to such in- 13 dividual is the sum of— 14 ‘‘(A) 100 percent of so much of the quali- 15 fied tuition and related expenses paid by the 16 taxpayer during the taxable year (for education 17 furnished to the eligible student during any 18 academic period beginning in such taxable year) 19 as does not exceed $2,000, plus 20 ‘‘(B) 25 percent of such expenses so paid 21 as exceeds $2,000 but does not exceed $4,000. 22 ‘‘(2) OTHER STUDENTS.—In the case of an eli- 23 gible student not described in paragraph (1), the 24 amount determined under this subsection with re- 25 spect to such individual is 25 percent of so much of 26 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6749 IH the qualified tuition and related expenses paid by 1 the taxpayer during the taxable year (for education 2 furnished to the eligible student during any aca- 3 demic period beginning in such taxable year) as does 4 not exceed $10,000. 5 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED 6 GROSS INCOME.— 7 ‘‘(1) IN GENERAL.—The amount which would 8 (but for this paragraph) be taken into account under 9 this section for the taxable year shall be reduced 10 (but not below zero) by the amount determined 11 under paragraph (2). 12 ‘‘(2) AMOUNT OF REDUCTION.—The amount 13 determined under this paragraph is the amount 14 which bears the same ratio to the amount which 15 would be so taken into account as— 16 ‘‘(A) the excess of— 17 ‘‘(i) the taxpayer’s modified adjusted 18 gross income for such taxable year, over 19 ‘‘(ii) $80,000 ($160,000 in the case of 20 a joint return), bears to 21 ‘‘(B) $10,000 ($20,000 in the case of a 22 joint return). 23 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.— 24 For purposes of this paragraph, the term ‘modified 25 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6749 IH adjusted gross income’ means the adjusted gross in- 1 come of the taxpayer for the taxable year increased 2 by any amount excluded from gross income under 3 section 911, 931, or 933. 4 ‘‘(d) OTHER LIMITATIONS AND SPECIAL RULES.— 5 For purposes of this section: 6 ‘‘(1) LIFETIME DOLLAR LIMITATION.—In the 7 case of qualified tuition and related expenses with 8 respect to any eligible student, the aggregate 9 amount of the credits allowed in the taxable year 10 and any prior taxable year for such eligible student 11 (whether beginning before or after American Oppor- 12 tunity Student Tax Relief Act of 2020) shall not ex- 13 ceed $15,000, determined without regard to wheth- 14 er— 15 ‘‘(A) such credits are claimed on the re- 16 turn of tax filed by the eligible student or by 17 another taxpayer, or 18 ‘‘(B) such expenses are treated as paid by 19 the eligible student or by another taxpayer. 20 If, in any taxable year, the aggregate amount of 21 such credits equals or exceeds $15,000, the amount 22 allowed as a credit under subsection (a) in any sub- 23 sequent taxable year with respect to such student 24 shall be zero. 25 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6749 IH ‘‘(2) IDENTIFICATION REQUIREMENTS.— 1 ‘‘(A) STUDENTS.— 2 ‘‘(i) IN GENERAL.—No credit shall be 3 allowed under this section to a taxpayer 4 with respect to the qualified tuition and re- 5 lated expenses of an eligible student unless 6 the taxpayer includes the name and tax- 7 payer identification number of such eligible 8 student on the return of tax for the taxable 9 year. 10 ‘‘(ii) ISSUANCE.—The requirements of 11 clause (i) shall not be treated as met un- 12 less the individual’s taxpayer identification 13 number was issued on or before the due 14 date for filing the return of tax for the tax- 15 able year. 16 ‘‘(B) TAXPAYER.—No credit shall be al- 17 lowed under this section if the identifying num- 18 ber of the taxpayer was issued after the due 19 date for filing the return for the taxable year. 20 ‘‘(C) INSTITUTION.—No credit shall be al- 21 lowed under this section unless the taxpayer in- 22 cludes the employer identification number of 23 any institution to which qualified tuition and 24 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6749 IH related expenses were paid with respect to the 1 individual. 2 ‘‘(3) ADJUSTMENT FOR CERTAIN SCHOLAR- 3 SHIPS, ETC.— 4 ‘‘(A) IN GENERAL.—The amount of quali- 5 fied tuition and related expenses otherwise 6 taken into account under this section with re- 7 spect to an individual for an academic period 8 shall be reduced (before the application of sub- 9 sections (b) and (c)) by the sum of any 10 amounts paid for the benefit of such individual 11 which are allocable to such period as— 12 ‘‘(i) a qualified scholarship which is 13 excludable from gross income under section 14 117, 15 ‘‘(ii) an educational assistance allow- 16 ance under chapter 30, 31, 32, 34, or 35 17 of title 38, United States Code, or under 18 chapter 1606 of title 10, United States 19 Code, and 20 ‘‘(iii) a payment (other than a gift, 21 bequest, devise, or inheritance within the 22 meaning of section 102(a)) for such indi- 23 vidual’s educational expenses, or attrib- 24 utable to such individual’s enrollment at an 25 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6749 IH eligible educational institution, which is ex- 1 cludable from gross income under any law 2 of the United States. 3 ‘‘(B) COORDINATION WITH PELL GRANTS 4 NOT USED FOR QUALIFIED TUITION AND RE- 5 LATED EXPENSES.—Any amount determined 6 with respect to an individual under subpara- 7 graph (A) which is attributable to a Federal 8 Pell Grant under section 401 of the Higher 9 Education Act of 1965 shall be reduced (but 10 not below zero) by the amount of the expenses 11 (other than qualified tuition and related ex- 12 penses) which are taken into account in deter- 13 mining the cost of attendance (as defined in 14 section 472 of the Higher Education Act of 15 1965, as in effect on the date of the enactment 16 of the American Opportunity Student Tax Re- 17 lief Act of 2020) of such individual at an eligi- 18 ble educational institution for the academic pe- 19 riod for which the credit under this section is 20 being determined. 21 ‘‘(4) TREATMENT OF EXPENSES PAID BY DE- 22 PENDENT.—If a deduction under section 151 with 23 respect to an individual is allowed to another tax- 24 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6749 IH payer for a taxable year beginning in the calendar 1 year in which such individual’s taxable year begins— 2 ‘‘(A) no credit shall be allowed under this 3 section to such individual for such individual’s 4 taxable year, and 5 ‘‘(B) qualified tuition and related expenses 6 paid by such individual during such individual’s 7 taxable year shall be treated for purposes of 8 this section as paid by such other taxpayer. 9 ‘‘(5) TREATMENT OF CERTAIN PREPAY- 10 MENTS.—If qualified tuition and related expenses 11 are paid by the taxpayer during a taxable year for 12 an academic period which begins during the first 3 13 months following such taxable year, such academic 14 period shall be treated for purposes of this section 15 as beginning during such taxable year. 16 ‘‘(6) DENIAL OF DOUBLE BENEFIT.—No credit 17 shall be allowed under this section for any expense 18 for which a deduction is allowed under any other 19 provision of this chapter. 20 ‘‘(7) NO CREDIT FOR MARRIED INDIVIDUALS 21 FILING SEPARATE RETURNS.—If the taxpayer is a 22 married individual (within the meaning of section 23 7703), this section shall apply only if the taxpayer 24 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 6749 IH and the taxpayer’s spouse file a joint return for the 1 taxable year. 2 ‘‘(8) NONRESIDENT ALIENS.—If the taxpayer is 3 a nonresident alien individual for any portion of the 4 taxable year, this section shall apply only if such in- 5 dividual is treated as a resident alien of the United 6 States for purposes of this chapter by reason of an 7 election under subsection (g) or (h) of section 6013. 8 ‘‘(e) ELECTION NOT TO HAVE SECTION APPLY.—A 9 taxpayer may elect not to have this section apply with re- 10 spect to the qualified tuition and related expenses of an 11 individual for any taxable year. 12 ‘‘(f) DEFINITIONS.—For purposes of this section: 13 ‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 14 student’ means, with respect to any taxable year, an 15 individual who— 16 ‘‘(A) is enrolled for at least one academic 17 period which begins during such taxable year at 18 an eligible educational institution, and 19 ‘‘(B) meets the requirements of section 20 484(a)(1) of the Higher Education Act of 1965, 21 as in effect on the date of the enactment of the 22 American Opportunity Student Tax Relief Act 23 of 2020. 24 VerDate Sep 11 2014 01:30 May 19, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6749.IH H6749 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 6749 IH ‘‘(2) QUALIFIED TUITION AND RELATED EX- 1 PENSES.— 2 ‘‘(A) IN GENERAL.—The term ‘qualified 3 tuition and related expenses’ means tuition, 4 fees, and course materials required for the en- 5 rollment or attendance of— 6 ‘‘(i) the taxpayer, 7 ‘‘(ii) the taxpayer’s spouse, or 8 ‘‘(iii) any dependent of the taxpayer 9 with respect to whom the taxpayer is al- 10 lowed a deduction under section 151, 11 at an eligible educational institution for courses 12 of instruction of such individual at such institu- 13 tion. 14 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV- 15 ING SPORTS, ETC.—Such term does not include 16 expenses with respect to any course or other 17 education involving sports, games, [Text truncated for display. 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