What This Bill Does
This bill creates a tax credit that lets individual taxpayers reduce their federal income taxes based on education expenses they pay for their children. The credit applies to tuition and certain other costs at public, private, charter, parochial, or religious elementary and secondary schools. The credit is refundable, meaning taxpayers can receive money back even if they owe no taxes.
Who It Affects
Individual taxpayers who pay tuition and education expenses for children attending elementary or secondary schools.
Key Provisions
• Taxpayers can claim a credit up to $10,000 per qualifying child per year for education expenses paid during that tax year (Sec. 3(a)(2))
• The credit reduces by $50 for every $1,000 (or partial $1,000) that a taxpayer's modified adjusted gross income (income with certain additions) exceeds $150,000 for joint filers or $75,000 for others (Sec. 3(b)(1) and (2)(A))
• Qualified education expenses include tuition, fees, computers, educational software, computer support services, required books, academic tutoring by others, special needs services for children with disabilities, transportation fees charged by private schools, and academic testing services, up to $1,500 for non-tuition items combined (Sec. 3(c)(2))
• Qualified educational institutions include any public, charter, private, parochial, or religious school providing elementary or secondary education (Sec. 3(c)(3))
• The amount claimed must be reduced by any funds received from Coverdell Savings Accounts (education savings accounts) for the same expenses (Sec. 3(d))
What Changes
If this becomes law, individual taxpayers can subtract education expenses from their federal income tax bills, with the credit decreasing for higher earners and capped at $10,000 per child per year.
Important Definitions
• Qualifying child: Not specified in bill text
• Children with disabilities: Children as defined in section 602(3) of the Individuals with Disabilities Education Act
• Modified adjusted gross income: Adjusted gross income (total income before deductions) increased by any amounts excluded under certain tax code sections
Effective Date
This law applies to tax years beginning after the date Congress enacts it.
I
118TH CONGRESS
1ST SESSION
H. R. 609
To amend the Internal Revenue Code of 1986 to allow a refundable credit
against income tax for tuition expenses incurred for each qualifying
child of the taxpayer in attending public or private elementary or sec-
ondary school.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 27, 2023
Mr. SMITH of New Jersey introduced the following bill; which was referred
to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
refundable credit against income tax for tuition expenses
incurred for each qualifying child of the taxpayer in
attending public or private elementary or secondary
school.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Education, Achieve-
4
ment, and Opportunity Act’’.
5
SEC. 2. FINDINGS.
6
Congress finds the following:
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•HR 609 IH
(1) Private schools supplement the public school
1
system and are a vital component of our Nation’s
2
school network.
3
(2) The public school system was created to
4
serve students, not the other way around. Children
5
should have the opportunity to attend the school sys-
6
tem that is most conducive to developing their abili-
7
ties, and parents have the right to choose the public
8
or private school that best meets their child’s indi-
9
vidual needs.
10
SEC. 3. CREDIT FOR ELEMENTARY AND SECONDARY EDU-
11
CATION EXPENSES.
12
(a) IN GENERAL.—Subpart C of part IV of sub-
13
chapter A of chapter 1 of the Internal Revenue Code of
14
1986 (relating to refundable credits) is amended by insert-
15
ing after section 36C the following new section:
16
‘‘SEC. 36D. ELEMENTARY AND SECONDARY EDUCATION EX-
17
PENSES.
18
‘‘(a) ALLOWANCE OF CREDIT.—
19
‘‘(1) IN
GENERAL.—In the case of an indi-
20
vidual, there shall be allowed as a credit against the
21
tax imposed by this subtitle for the taxable year the
22
amount of the qualified education expenses paid by
23
the taxpayer during the taxable year for each quali-
24
fying child of the taxpayer.
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•HR 609 IH
‘‘(2) AMOUNT
PER
CHILD.—The amount of
1
credit allowable under paragraph (1) for any taxable
2
year with respect to the qualified education expenses
3
of each qualifying child of the taxpayer shall not ex-
4
ceed $10,000.
5
‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN-
6
COME.—
7
‘‘(1) IN GENERAL.—The amount of the credit
8
allowable under subsection (a) (after the application
9
of subsection (a)(2)) shall be reduced (but not below
10
zero) by $50 for each $1,000 (or fraction thereof) by
11
which the taxpayer’s modified adjusted gross income
12
exceeds the threshold amount.
13
‘‘(2) DEFINITIONS AND SPECIAL RULES.—For
14
purposes of this paragraph (1)—
15
‘‘(A) THRESHOLD
AMOUNT.—The term
16
‘threshold amount’ means—
17
‘‘(i) $150,000 in the case of a joint
18
return, and
19
‘‘(ii) $75,000 in any other case.
20
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
21
COME.—The term ‘modified adjusted gross in-
22
come’ means adjusted gross income increased
23
by any amount excluded from gross income
24
under section 911, 931, or 933.
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•HR 609 IH
‘‘(C) MARITAL
STATUS.—Marital status
1
shall be determined under section 7703.
2
‘‘(c) DEFINITIONS.—For purposes of this section—
3
‘‘(1) QUALIFYING CHILD.—The term ‘qualifying
4
child’ has the meaning given such term in section
5
24(c).
6
‘‘(2) QUALIFIED EDUCATION EXPENSES.—
7
‘‘(A) IN
GENERAL.—The term ‘qualified
8
education expenses’ means amounts paid for—
9
‘‘(i) tuition and fees required for the
10
enrollment or attendance of a student at a
11
qualified educational institution, and
12
‘‘(ii) so much of the following non-tui-
13
tion expenses as does not exceed $1,500:
14
‘‘(I) Computers, educational soft-
15
ware, computer support services, and
16
books required for courses of instruc-
17
tion at a qualified educational institu-
18
tion.
19
‘‘(II) Academic tutoring (by a
20
person other than the taxpayer).
21
‘‘(III) Special needs services for
22
qualifying children who are children
23
with disabilities (as such term is de-
24
fined in section 602(3) of the Individ-
25
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•HR 609 IH
uals with Disabilities Education Act
1
(20 U.S.C. 1401(3))).
2
‘‘(IV) Fees for transportation
3
services to and from a private school,
4
if the transportation is provided by
5
the school and the school charges a
6
fee for the transportation.
7
‘‘(V) Academic testing services.
8
‘‘(B) AMOUNTS
EXCLUDED.—The term
9
does not include special school fees for nonaca-
10
demic purposes, including fees for student ac-
11
tivities, athletics, insurance, school uniforms,
12
and nonacademic after-school activities.
13
‘‘(3) QUALIFIED EDUCATIONAL INSTITUTION.—
14
The term ‘qualified educational institution’ means
15
any public, charter, private, parochial, or religious
16
school organized for the purpose of providing ele-
17
mentary or secondary education, or both, without re-
18
gard to the religious nature, character, affiliation,
19
mission, beliefs, or exercise of such school.
20
‘‘(d) ADJUSTMENT FOR COVERDELL SAVINGS AC-
21
COUNT DISTRIBUTIONS.—The amount of qualified edu-
22
cation expenses taken into account under subsection (a)
23
with respect to an individual for a taxable year shall be
24
reduced (before the application of subsection (b)) by the
25
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•HR 609 IH
sum of any amounts not includible in gross income under
1
section 530(d)(2) for such taxable year by reason of the
2
qualified elementary and secondary education expenses (as
3
defined in section 530(b)(3)) of such individual for such
4
taxable year.’’.
5
(b) TECHNICAL AMENDMENTS.—
6
(1) Paragraph (2) of section 1324(b) of title
7
31, United States Code, is amended by inserting
8
‘‘36D,’’ after ‘‘36B,’’.
9
(2) The table of sections for subpart C of part
10
IV of subchapter A of chapter 1 of the Internal Rev-
11
enue Code of 1986 is amended by inserting after the
12
item relating to section 36C the following new item:
13
‘‘Sec. 36D. Elementary and secondary education expenses.’’.
(c) EFFECTIVE DATE.—The amendments made by
14
this section shall apply to taxable years beginning after
15
the date of the enactment of this Act.
16
Æ
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