H.R. 6749, American Opportunity Student Tax Relief Act of 2020
Summary
H.R. 6749, the American Opportunity Student Tax Relief Act of 2020, is a bill introduced in the House of Representatives on May 8, 2020 by Mr. Doggett and referred to the Committee on Ways and Means. Its stated purpose is to amend the Internal Revenue Code of 1986 to extend and modify the American Opportunity Tax Credit, and for other purposes. Section 2 is titled COVID Relief. The text ends with a provision on the effective date, stating that the amendment applies to taxable years beginning after December 31, 2020.
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“H.R. 6749, American Opportunity Student Tax Relief Act of 2020.”
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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. SÁNCHEZ,
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.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.
2 This Act may be cited as the ‘‘American Opportunity
3 Student Tax Relief Act of 2020’’.
4 SEC. 2. COVID RELIEF.
5 (a) AMERICAN OPPORTUNITY AND LIFETIME LEARN-
6 ING CREDITS.—Section 25A of the Internal Revenue Code
7 of 1986 is amended by adding at the end the following
8 new subsection:
9 ‘‘(j) COVID RELIEF.—In the case of any taxable
10 year beginning in 2020:
11 ‘‘(1) Subsection (b)(1)(A) shall be applied by
12 substituting ‘$2,500’ for ‘$2,000’.
13 ‘‘(2) Subsection (b)(1)(B) shall be applied—
14 ‘‘(A) by substituting ‘$2,500’ for ‘$2,000’,
15 and
16 ‘‘(B) by substituting ‘$4,500’ for ‘$4,000’.
17 ‘‘(3) Subsection (i) shall be applied by sub-
18 stituting ‘Sixty percent’ for ‘Forty percent’.
19 ‘‘(4) The amount determined under subsection
20 (c)(1) shall be the sum of—
21 ‘‘(A) 100 percent of so much of the quali-
22 fied tuition and related expenses paid the tax-
23 payer during the taxable year (for education
24 furnished during any academic period beginning
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25 in such taxable year) as does not exceed
26 $2,000, plus
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1 ‘‘(B) 20 percent of such expenses so paid
2 as exceeds $2,000 but does not exceed $10,000.
3 ‘‘(5) So much of the credit allowable under sub-
4 section (a) as is attributable to the Lifetime Learn-
5 ing Credit (determined after application of sub-
6 section (d) and without regard to this paragraph
7 and section 26(a)) and does not exceed $1,500 shall
8 be treated as a credit allowable under subpart C
9 (and not allowed under subsection (a)).’’.
10 (b) EXPANSION OF PELL GRANT EXCLUSION FROM
11 GROSS INCOME.—Section 4(b) of this Act is amended by
12 striking ‘‘December 31, 2020’’ and inserting ‘‘December
13 31, 2019’’.
14 (c) EXCLUSION OF EMERGENCY FINANCIAL AID
15 GRANTS.—For purposes of the Internal Revenue Code of
16 1986, in the case of any taxable year beginning in 2020,
17 gross income shall not include any emergency financial aid
18 grant received by a student under section 18004(c) of the
19 CARES Act.
20 SEC. 3. EXTENSION AND MODIFICATION OF AMERICAN OP-
21 PORTUNITY TAX CREDIT.
22 (a) IN GENERAL.—Section 25A of the Internal Rev-
23 enue Code of 1986, as amended by section 2, is amended
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24 to read as follows:
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1 ‘‘SEC. 25A. AMERICAN OPPORTUNITY TAX CREDIT.
2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
3 dividual who is an eligible student for any taxable year,
4 there shall be allowed as a credit against the tax imposed
5 by this chapter for such taxable year the amount deter-
6 mined under subsection (b) with respect to such indi-
7 vidual.
8 ‘‘(b) AMOUNT OF CREDIT.—
9 ‘‘(1) STUDENT ENROLLED AT LEAST 1⁄2 TIME.—
10 In the case of an eligible student who is carrying at
11 least 1⁄2 the normal full-time workload for the course
12 of study the student is pursuing, the amount deter-
13 mined under this subsection with respect to such in-
14 dividual is the sum of—
15 ‘‘(A) 100 percent of so much of the quali-
16 fied tuition and related expenses paid by the
17 taxpayer during the taxable year (for education
18 furnished to the eligible student during any
19 academic period beginning in such taxable year)
20 as does not exceed $2,000, plus
21 ‘‘(B) 25 percent of such expenses so paid
22 as exceeds $2,000 but does not exceed $4,000.
23 ‘‘(2) OTHER STUDENTS.—In the case of an eli-
24 gible student not described in paragraph (1), the
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25 amount determined under this subsection with re-
26 spect to such individual is 25 percent of so much of
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1 the qualified tuition and related expenses paid by
2 the taxpayer during the taxable year (for education
3 furnished to the eligible student during any aca-
4 demic period beginning in such taxable year) as does
5 not exceed $10,000.
6 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED
7 GROSS INCOME.—
8 ‘‘(1) IN GENERAL.—The amount which would
9 (but for this paragraph) be taken into account under
10 this section for the taxable year shall be reduced
11 (but not below zero) by the amount determined
12 under paragraph (2).
13 ‘‘(2) AMOUNT OF REDUCTION.—The amount
14 determined under this paragraph is the amount
15 which bears the same ratio to the amount which
16 would be so taken into account as—
17 ‘‘(A) the excess of—
18 ‘‘(i) the taxpayer’s modified adjusted
19 gross income for such taxable year, over
20 ‘‘(ii) $80,000 ($160,000 in the case of
21 a joint return), bears to
22 ‘‘(B) $10,000 ($20,000 in the case of a
23 joint return).
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24 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—
25 For purposes of this paragraph, the term ‘modified
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1 adjusted gross income’ means the adjusted gross in-
2 come of the taxpayer for the taxable year increased
3 by any amount excluded from gross income under
4 section 911, 931, or 933.
5 ‘‘(d) OTHER LIMITATIONS AND SPECIAL RULES.—
6 For purposes of this section:
7 ‘‘(1) LIFETIME DOLLAR LIMITATION.—In the
8 case of qualified tuition and related expenses with
9 respect to any eligible student, the aggregate
10 amount of the credits allowed in the taxable year
11 and any prior taxable year for such eligible student
12 (whether beginning before or after American Oppor-
13 tunity Student Tax Relief Act of 2020) shall not ex-
14 ceed $15,000, determined without regard to wheth-
15 er—
16 ‘‘(A) such credits are claimed on the re-
17 turn of tax filed by the eligible student or by
18 another taxpayer, or
19 ‘‘(B) such expenses are treated as paid by
20 the eligible student or by another taxpayer.
21 If, in any taxable year, the aggregate amount of
22 such credits equals or exceeds $15,000, the amount
23 allowed as a credit under subsection (a) in any sub-
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24 sequent taxable year with respect to such student
25 shall be zero.
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1 ‘‘(2) IDENTIFICATION REQUIREMENTS.—
2 ‘‘(A) STUDENTS.—
3 ‘‘(i) IN GENERAL.—No credit shall be
4 allowed under this section to a taxpayer
5 with respect to the qualified tuition and re-
6 lated expenses of an eligible student unless
7 the taxpayer includes the name and tax-
8 payer identification number of such eligible
9 student on the return of tax for the taxable
10 year.
11 ‘‘(ii) ISSUANCE.—The requirements of
12 clause (i) shall not be treated as met un-
13 less the individual’s taxpayer identification
14 number was issued on or before the due
15 date for filing the return of tax for the tax-
16 able year.
17 ‘‘(B) TAXPAYER.—No credit shall be al-
18 lowed under this section if the identifying num-
19 ber of the taxpayer was issued after the due
20 date for filing the return for the taxable year.
21 ‘‘(C) INSTITUTION.—No credit shall be al-
22 lowed under this section unless the taxpayer in-
23 cludes the employer identification number of
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24 any institution to which qualified tuition and
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1 related expenses were paid with respect to the
2 individual.
3 ‘‘(3) ADJUSTMENT FOR CERTAIN SCHOLAR-
4 SHIPS, ETC.—
5 ‘‘(A) IN GENERAL.—The amount of quali-
6 fied tuition and related expenses otherwise
7 taken into account under this section with re-
8 spect to an individual for an academic period
9 shall be reduced (before the application of sub-
10 sections (b) and (c)) by the sum of any
11 amounts paid for the benefit of such individual
12 which are allocable to such period as—
13 ‘‘(i) a qualified scholarship which is
14 excludable from gross income under section
15 117,
16 ‘‘(ii) an educational assistance allow-
17 ance under chapter 30, 31, 32, 34, or 35
18 of title 38, United States Code, or under
19 chapter 1606 of title 10, United States
20 Code, and
21 ‘‘(iii) a payment (other than a gift,
22 bequest, devise, or inheritance within the
23 meaning of section 102(a)) for such indi-
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24 vidual’s educational expenses, or attrib-
25 utable to such individual’s enrollment at an
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1 eligible educational institution, which is ex-
2 cludable from gross income under any law
3 of the United States.
4 ‘‘(B) COORDINATION WITH PELL GRANTS
5 NOT USED FOR QUALIFIED TUITION AND RE-
6 LATED EXPENSES.—Any amount determined
7 with respect to an individual under subpara-
8 graph (A) which is attributable to a Federal
9 Pell Grant under section 401 of the Higher
10 Education Act of 1965 shall be reduced (but
11 not below zero) by the amount of the expenses
12 (other than qualified tuition and related ex-
13 penses) which are taken into account in deter-
14 mining the cost of attendance (as defined in
15 section 472 of the Higher Education Act of
16 1965, as in effect on the date of the enactment
17 of the American Opportunity Student Tax Re-
18 lief Act of 2020) of such individual at an eligi-
19 ble educational institution for the academic pe-
20 riod for which the credit under this section is
21 being determined.
22 ‘‘(4) TREATMENT OF EXPENSES PAID BY DE-
23 PENDENT.—If a deduction under section 151 with
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24 respect to an individual is allowed to another tax-
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1 payer for a taxable year beginning in the calendar
2 year in which such individual’s taxable year begins—
3 ‘‘(A) no credit shall be allowed under this
4 section to such individual for such individual’s
5 taxable year, and
6 ‘‘(B) qualified tuition and related expenses
7 paid by such individual during such individual’s
8 taxable year shall be treated for purposes of
9 this section as paid by such other taxpayer.
10 ‘‘(5) TREATMENT OF CERTAIN PREPAY-
11 MENTS.—If qualified tuition and related expenses
12 are paid by the taxpayer during a taxable year for
13 an academic period which begins during the first 3
14 months following such taxable year, such academic
15 period shall be treated for purposes of this section
16 as beginning during such taxable year.
17 ‘‘(6) DENIAL OF DOUBLE BENEFIT.—No credit
18 shall be allowed under this section for any expense
19 for which a deduction is allowed under any other
20 provision of this chapter.
21 ‘‘(7) NO CREDIT FOR MARRIED INDIVIDUALS
22 FILING SEPARATE RETURNS.—If the taxpayer is a
23 married individual (within the meaning of section
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24 7703), this section shall apply only if the taxpayer
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1 and the taxpayer’s spouse file a joint return for the
2 taxable year.
3 ‘‘(8) NONRESIDENT ALIENS.—If the taxpayer is
4 a nonresident alien individual for any portion of the
5 taxable year, this section shall apply only if such in-
6 dividual is treated as a resident alien of the United
7 States for purposes of this chapter by reason of an
8 election under subsection (g) or (h) of section 6013.
9 ‘‘(e) ELECTION NOT TO HAVE SECTION APPLY.—A
10 taxpayer may elect not to have this section apply with re-
11 spect to the qualified tuition and related expenses of an
12 individual for any taxable year.
13 ‘‘(f) DEFINITIONS.—For purposes of this section:
14 ‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible
15 student’ means, with respect to any taxable year, an
16 individual who—
17 ‘‘(A) is enrolled for at least one academic
18 period which begins during such taxable year at
19 an eligible educational institution, and
20 ‘‘(B) meets the requirements of section
21 484(a)(1) of the Higher Education Act of 1965,
22 as in effect on the date of the enactment of the
23 American Opportunity Student Tax Relief Act
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24 of 2020.
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1 ‘‘(2) QUALIFIED TUITION AND RELATED EX-
2 PENSES.—
3 ‘‘(A) IN GENERAL.—The term ‘qualified
4 tuition and related expenses’ means tuition,
5 fees, and course materials required for the en-
6 rollment or attendance of—
7 ‘‘(i) the taxpayer,
8 ‘‘(ii) the taxpayer’s spouse, or
9 ‘‘(iii) any dependent of the taxpayer
10 with respect to whom the taxpayer is al-
11 lowed a deduction under section 151,
12 at an eligible educational institution for courses
13 of instruction of such individual at such institu-
14 tion.
15 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV-
16 ING SPORTS, ETC.—Such term does not include
17 expenses with respect to any course or other
18 education involving sports, games, or hobbies,
19 unless such course or other education is part of
20 the individual’s degree program.
21 ‘‘(C) EXCEPTION FOR NONACADEMIC
22 FEES.—Such term does not include student ac-
23 tivity fees, athletic fees, insurance expenses, or
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24 other expenses unrelated to an individual’s aca-
25 demic course of instruction.
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1 ‘‘(3) ELIGIBLE EDUCATIONAL INSTITUTION.—
2 The term ‘eligible educational institution’ means an
3 institution—
4 ‘‘(A) which is described in section 481 of
5 the Higher Education Act of 1965, as in effect
6 on the date of the enactment of the American
7 Opportunity Student Tax Relief Act of 2020,
8 and
9 ‘‘(B) which is eligible to participate in a
10 program under title IV of such Act.
11 ‘‘(g) PORTION OF CREDIT REFUNDABLE.—The less-
12 er of—
13 ‘‘(1) the credit allowed under this section for a
14 taxable year (determined after application of sub-
15 sections (c)(1) and (d) and without regard to this
16 subsection and section 26(a)(2), as the case may
17 be), or
18 ‘‘(2) $1,500,
19 shall be treated as a credit allowable under subpart C (and
20 not allowed under this section). The preceding sentence
21 shall not apply to any taxpayer for any taxable year if
22 such taxpayer is a child to whom subsection (g) of section
23 1 applies for such taxable year.
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24 ‘‘(h) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
25 ERLY CLAIMED CREDIT IN PRIOR YEAR.—
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1 ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT
2 OR RECKLESS CLAIMS.—
3 ‘‘(A) IN GENERAL.—No credit shall be al-
4 lowed under this section for any taxable year in
5 the disallowance period.
6 ‘‘(B) DISALLOWANCE PERIOD.—For pur-
7 poses of clause (i), the disallowance period is—
8 ‘‘(i) the period of 10 taxable years
9 after the most recent taxable year for
10 which there was a final determination that
11 the taxpayer’s claim of credit under this
12 section was due to fraud, and
13 ‘‘(ii) the period of 2 taxable years
14 after the most recent taxable year for
15 which there was a final determination that
16 the taxpayer’s claim of credit under this
17 section was due to reckless or intentional
18 disregard of rules and regulations (but not
19 due to fraud).
20 ‘‘(2) TAXPAYERS MAKING IMPROPER PRIOR
21 CLAIMS.—In the case of a taxpayer who is denied
22 credit under this section for any taxable year as a
23 result of the deficiency procedures under subchapter
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24 B of chapter 63, no credit shall be allowed under
25 this section for any subsequent taxable year unless
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1 the taxpayer provides such information as the Sec-
2 retary may require to demonstrate eligibility for
3 such credit.
4 ‘‘(i) INFLATION ADJUSTMENT.—In the case of any
5 taxable year beginning in a calendar year after 2020, each
6 dollar amount in subsections (b) and (c)(2), and (d)(1)
7 shall be increased by an amount equal to—
8 ‘‘(1) such dollar amount, multiplied by
9 ‘‘(2) the cost-of-living adjustment determined
10 under section 1(f)(3) for the calendar year in which
11 the taxable year begins, determined by substituting
12 ‘calendar year 2017’ for ‘calendar year 1992’ in sub-
13 paragraph (B) thereof.
14 In the case of subsections (b) and (d)(1), any increase de-
15 termined under the preceding sentence shall be rounded
16 to the nearest multiple of $50. In the case of subsection
17 (c)(2), any increase determined under the preceding sen-
18 tence shall be rounded to the nearest multiple of $500.
19 ‘‘(j) REGULATIONS.—The Secretary may prescribe
20 such regulations as may be necessary or appropriate to
21 carry out this section, including regulations providing for
22 a recapture of the credit allowed under this section in
23 cases where there is a refund in a subsequent taxable year
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24 of any amount which was taken into account in deter-
25 mining the amount of such credit.’’.
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1 (b) RETENTION OF LIMITATION.—
2 (1) IN GENERAL.—Subparagraph (D) of section
3 25A(b)(2) of the Internal Revenue Code of 1986, as
4 in effect before the enactment of the American Op-
5 portunity Student Tax Relief Act of 2020, is hereby
6 transferred to section 25A of such Code, as amended
7 by subsection (a), and is inserted as a new sub-
8 section (d)(9) of section 25A, as so amended.
9 (2) CONFORMING AMENDMENT.—Paragraph (9)
10 of section 25A(d) of such Code, as transferred and
11 inserted by paragraph (1), is amended by striking
12 ‘‘The Hope Scholarship Credit under subsection
13 (a)(1)’’ and inserting ‘‘The credit under subsection
14 (a)’’.
15 (c) CONFORMING AMENDMENTS.—
16 (1) Subparagraph (B) of section 72(t)(7) of
17 such Code is amended by striking ‘‘25A(g)(2)’’ and
18 inserting ‘‘25A(d)(3)’’.
19 (2) Paragraph (2) of section 221(d) of such
20 Code is amended—
21 (A) by striking ‘‘25A(g)(2)’’ in subpara-
22 graph (B) and inserting ‘‘25A(d)(3)’’; and
23 (B) by striking ‘‘25A(f)(2)’’ and inserting
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24 ‘‘25A(f)(3)’’.
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1 (3) Paragraph (3) of section 221(d) of such
2 Code is amended by striking ‘‘25A(b)(3)’’ and in-
3 serting ‘‘25A(f)(1) (but only with respect to a stu-
4 dent who is carrying at least 1⁄2 the normal full-time
5 workload for the course of study the student is pur-
6 suing)’’.
7 (4) Clause (v) of section 529(c)(3)(B) of such
8 Code is amended—
9 (A) by striking ‘‘25A(g)(2)’’ in subclause
10 (I) and inserting ‘‘25A(d)(3)’’; and
11 (B) by striking ‘‘HOPE AND LIFETIME
12 LEARNING CREDITS’’ in the heading and insert-
13 ing ‘‘AMERICAN OPPORTUNITY CREDIT’’.
14 (5) Clause (i) of section 529(e)(3)(B) of such
15 Code is amended by striking ‘‘25A(b)(3)’’ and in-
16 serting ‘‘25A(f)(1) (but only with respect to a stu-
17 dent who is carrying at least 1⁄2 the normal full-time
18 workload for the course of study the student is pur-
19 suing)’’.
20 (6) Subparagraph (C) of section 530(d)(2) of
21 such Code is amended—
22 (A) by striking ‘‘25A(g)(2)’’ in clause (i)(I)
23 and inserting ‘‘25A(d)(3)’’; and
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1 (B) by striking ‘‘HOPE AND LIFETIME
2 LEARNING CREDITS’’ in the heading and insert-
3 ing ‘‘AMERICAN OPPORTUNITY CREDIT’’.
4 (7) Clause (iii) of section 530(d)(4)(B)(iii) of
5 such Code is amended by striking ‘‘25A(g)(2)’’ and
6 inserting ‘‘25A(d)(3)’’.
7 (8) Section 1400O of such Code is amended—
8 (A) by striking ‘‘25A(f)(2)’’ and inserting
9 ‘‘25A(f)(3)’’;
10 (B) by inserting ‘‘(as in effect on the date
11 of the enactment of this section)’’ after
12 ‘‘25A(b)(1)’’ in paragraph (2); and
13 (C) by inserting ‘‘(as in effect on the date
14 of the enactment of this section)’’ after
15 ‘‘25A(c)(1)’’ in paragraph (3).
16 (9) Subsection (e) of section 6050S of such
17 Code is amended by striking ‘‘subsection (g)(2)’’ and
18 inserting ‘‘subsection (d)(3)’’.
19 (10) Subparagraph (A) of section 6211(b)(4) of
20 such Code is amended by striking ‘‘subsection
21 (i)(6)’’ and inserting ‘‘subsection (g)’’.
22 (11) Section 6213(g)(2) of such Code is amend-
23 ed—
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24 (A) in subparagraph (J), by striking
25 ‘‘25A(g)(1)’’ and inserting ‘‘25A(d)(2)’’; and
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1 (B) in subparagraph (Q), by striking
2 ‘‘25A(i)(8)(B)’’ and inserting ‘‘25A(h)(2)’’ and
3 by striking ‘‘25A(i)’’ and inserting ‘‘25A’’.
4 (12) Subsection (g) of section 6695 of such
5 Code is amended by striking ‘‘25A(a)(1)’’ and in-
6 serting ‘‘25A(a)’’.
7 (d) CLERICAL AMENDMENT.—The item relating to
8 section 25A in the table of sections for subpart A of part
9 IV of subchapter A of chapter 1 of the Internal Revenue
10 Code of 1986 is amended to read as follows:
‘‘Sec. 25A. American Opportunity Tax Credit.’’.
11 (e) EFFECTIVE DATE.—The amendments made by
12 this section shall apply to taxable years beginning after
13 December 31, 2020.
14 SEC. 4. EXPANSION OF PELL GRANT EXCLUSION FROM
15 GROSS INCOME.
16 (a) IN GENERAL.—Paragraph (1) of section 117(b)
17 of the Internal Revenue Code of 1986 is amended by strik-
18 ing ‘‘received by an individual’’ and all that follows and
19 inserting ‘‘received by an individual—
20 ‘‘(A) as a scholarship or fellowship grant
21 to the extent the individual establishes that, in
22 accordance with the conditions of the grant,
23 such amount was used for qualified tuition and
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24 related expenses; or
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1 ‘‘(B) as a Federal Pell Grant under section
2 401 of the Higher Education Act of 1965 (as
3 in effect on the date of the enactment of the
4 American Opportunity Student Tax Relief Act
5 of 2020).’’.
6 (b) EFFECTIVE DATE.—The amendment made by
7 this section shall apply to taxable years beginning after
8 December 31, 2020.
Æ
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