Amends the Internal Revenue Code to increase: (1 ) the amount of the Hope Scholarship income tax credit to 100 percent of tuition and related expenses up to $2,500, and (2) the number of years for which the credit can be claimed from two to four years. Makes such credit and the Lifetime Learning credit refundable.
Directs the Secretary of the Treasury to establish a program for making advance payments of Hope Scholarship and Lifetime Learning income tax credit amounts to schools for the benefit of the taxpayer. Requires a taxpayer for whom an advance payment is made to file specified informational returns.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2087 Introduced in Senate (IS)]
2d Session
S. 2087
To amend the Internal Revenue Code of 1986 to expand the Hope
Scholarship and Lifetime Learning Credits.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 12, 2004
Mr. Graham of Florida introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to expand the Hope
Scholarship and Lifetime Learning Credits.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. HOPE SCHOLARSHIP CREDIT.
(a) Expansion of Credit.--
(1) In general.--Section 25A(b) of the Internal Revenue
Code of 1986 (relating to Hope Scholarship Credit) is amended--
(A) in paragraph (1), by striking ``the sum of''
and all that follows and inserting ``100 percent of so
much of the qualified tuition and related expenses paid
by the taxpayer during the taxable year (for education
furnished to the eligible student during any academic
period beginning in such taxable year) as does not
exceed $2,500.'',
(B) in paragraph (2)(A), by striking ``2'' in the
text and in the heading and inserting ``4'',
(C) in paragraph (2)(C), by striking ``2'' in the
text and in the heading and inserting ``4'', and
(D) by striking paragraph (4).
(2) Conforming amendments.--Section 25A(h)(1)(A) of such
Code (relating to inflation adjustments) is amended--
(A) by striking ``2001'' and inserting ``2004'',
(B) by striking ``each of the $1,000 amounts'' and
inserting ``the $2,500 amount'', and
(C) by striking ``2000'' and inserting ``2003''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
SEC. 2. REFUNDABILITY OF HOPE AND LIFETIME LEARNING CREDIT.
(a) Refundable Credit.--
(1) In general.--Section 25A of the Internal Revenue Code
of 1986 is hereby moved to subpart C of part IV of subchapter A
of chapter 1 of such Code (relating to refundable credits) and
inserted after section 35.
(2) Technical amendments.--
(A) Section 36 of such Code is redesignated as
section 37.
(B) Section 25A of such Code (as moved by
subsection (a)) is redesignated as section 36.
(C) Paragraph (1) of section 36(a) of such Code (as
redesignated by paragraph (2)) is amended by striking
``this chapter'' and inserting ``this subtitle''.
(D) Section 36 of such Code (as so redesignated) is
amended by redesignating subsection (i) as subsection
(j) and by inserting after subsection (h) the following
new subsection:
``(i) Coordination With Advance Payment.--With respect to any
taxable year, the amount which would (but for this subsection) be
allowed as a credit to the taxpayer under subsection (a) shall be
reduced (but not below zero) by the aggregate amount paid on behalf of
such taxpayer under section 7528 for such taxable year.''.
(E) Subparagraph (B) of section 72(t)(7) of such
Code is amended by striking ``section 25A(g)(2)'' and
inserting ``section 36(g)(2)''.
(F) Subparagraph (A) of section 135(d)(2) of such
Code is amended by striking ``section 25A'' and
inserting ``section 36''.
(G) Section 221(d) of such Code is amended--
(i) by striking ``section 25A(g)(2)'' in
paragraph (2)(B) and inserting ``section
36(g)(2)'',
(ii) by striking ``section 25A(f)(2)'' in
paragraph (2)(B) and inserting ``section
36(f)(2)'', and
(iii) by striking ``section 25A(b)(3)'' in
paragraph (3) and inserting ``section
36(b)(3)''.
(H) Section 222 of such Code is amended--
(i) by striking ``section 25A'' in
subparagraph (A) of subsection (c)(2) and
inserting ``section 36'',
(ii) by striking ``section 25A(f)'' in
subsection (d)(1) and inserting ``section
36(f)'', and
(iii) by striking ``section 25A(g)(2)'' in
subsection (d)(1) and inserting ``section
36(g)(2)''.
(I) Section 529 of such Code is amended--
(i) by striking ``section 25A(g)(2)'' in
subclause (I) of subsection (c)(3)(B)(v) and
inserting ``section 36(g)(2)'',
(ii) by striking ``section 25A'' in
subclause (II) of subsection (c)(3)(B)(v) and
inserting ``section 36'', and
(iii) by striking ``section 25A(b)(3)'' in
clause (i) of subsection (e)(3)(B) and
inserting ``section 36(b)(3)''.
(J) Section 530 of such Code is amended--
(i) by striking ``section 25A(g)(2)'' in
subclause (I) of subsection (d)(2)(C)(i) and
inserting ``section 36(g)(2)'',
(ii) by striking ``section 25A'' in
subclause (II) of subsection (d)(2)(C)(i) and
inserting ``section 36'', and
(iii) by striking ``section 25A(g)(2)'' in
clause (iii) of subsection (d)(4)(B) and
inserting ``section 36(g)(2)''.
(K) Subsection (e) of section 6050S of such Code is
amended by striking ``section 25A'' and inserting
``section 36''.
(L) Subparagraph (J) of section 6213(g)(2) of such
Code is amended by striking ``section 25A(g)(1)'' and
inserting ``section 36(g)(1)''.
(M) Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended by inserting before the
period ``or from section 36 of such Code''.
(N) The table of sections for subpart C of part IV
of subchapter A of chapter 1 of such Code is amended by
striking the item relating to section 36 and inserting
the following:
``Sec. 36. Hope and Lifetime Learning
credits.
``Sec. 37. Overpayments of tax.''.
(O) The table of sections for subpart A of part IV
of such Code is amended by striking the item relating
to section 25A.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
SEC. 3. ADVANCE PAYMENT OF CREDIT FOR HOPE SCHOLARSHIP AND LIFETIME
LEARNING.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986
(relating to miscellaneous provisions) is amended by redesignating
section 7528 as section 7529 and inserting after section 7527 the
following new section:
``SEC. 7528. ADVANCE PAYMENT OF CREDIT FOR HOPE SCHOLARSHIP AND
LIFETIME LEARNING.
``(a) General Rule.--Not later than August 1, 2004, the Secretary
shall establish a program for making payments on behalf of certified
individuals to eligible educational institutions (as defined in section
36(f)(2)) for such individuals.
``(b) Limitation on Advance Payments During Any Taxable Year.--The
Secretary may make payments under subsection (a) only to the extent
that the total amount of such payments made on behalf of any individual
during the taxable year does not exceed the qualified tuition and
related expenses (within the meaning of section 36(f)(1)) incurred by
such individual at such eligible educational institution during the
taxable year.
``(c) Certified Individual.--For purposes of this section, the term
`certified individual' means any individual for whom a qualified
education costs credit eligibility certificate is in effect.
``(d) Qualified Education Costs Credit Eligibility Certificate.--
For purposes of this section, the term `qualified education costs
credit eligibility certificate' means any written statement that an
individual has incurred costs which are qualified tuition and related
expenses (within the meaning of section 36(f)(1)) if such statement
provides such information as the Secretary may require for purposes of
this section.''.
(b) Disclosure of Return Information for Purposes of Carrying Out a
Program for Advance Payment of Credit for Hope Scholarship and Lifetime
Learning.--
(1) In general.--Subsection (l) of section 6103 of such
Code (relating to disclosure of returns and return information
for purposes other than tax administration) is amended by
adding at the end the following new paragraph:
``(21) Disclosure of return information for purposes of
carrying out a program for advance payment of credit for hope
scholarship and lifetime learning.--The Secretary may disclose
to educational institutions for any certified individual (as
defined in section 7528(c)) return information with respect to
such certified individual only to the extent necessary to carry
out the program established by section 7528 (relating to
advance payment of credit for hope scholarship and lifetime
learning).''.
(2) Procedures and recordkeeping related to disclosures.--
Subsection (p) of such section is amended--
(A) in paragraph (3)(A) by striking ``or (18)'' and
inserting ``(18), or (21)'', and
(B) in paragraph (4) by striking ``or (20)'' and
inserting ``(20), or (21)'' each place it appears.
(3) Unauthorized inspection of returns or return
information.--Section 7213A(a)(1)(B) of such Code is amended by
striking ``(l)(18) or (n)'' and inserting ``(l)(18), (l)(19),
or (n)''.
(c) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 (relating to
information concerning transactions with other persons) is
amended by inserting after section 6050S the following new
section:
``SEC. 6050U. RETURNS RELATING TO CREDIT FOR HOPE SCHOLARSHIP AND
LIFETIME LEARNING.
``(a) Requirement of Reporting.--Every person who is entitled to
receive payments for any month of any calendar year under section 7528
(relating to advance payment of credit for hope scholarship and
lifetime learning) with respect to any certified individual (as defined
in section 7528(c)) shall, at such time as the Secretary may prescribe,
make the return described in subsection (b) with respect to each such
individual.
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of each individual
referred to in subsection (a),
``(B) the number of months for which amounts were
entitled to be received with respect to such individual
under section 7528 (relating to advance payment of
credit for hope scholarship and lifetime learning),
``(C) the amount entitled to be received for each
such year, and
``(D) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Individuals With Respect to
Whom Information Is Required.--Every person required to make a return
under subsection (a) shall furnish to each individual whose name is
required to be set forth in such return a written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact for
such person, and
``(2) the information required to be shown on the return
with respect to such individual.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) is required to be
made.''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such
Code (relating to definitions) is amended by
redesignating clauses (xii) through (xviii) as clauses
(xiii) through (xiv), respectively, and by inserting
after clause (xi) the following new clause:
``(xii) section 6050U (relating to returns
relating to credit for hope scholarship and
lifetime learning),''.
(B) Paragraph (2) of section 6724(d) of such Code
is amended by striking ``or'' at the end of
subparagraph (AA), by striking the period at the end of
subparagraph (BB) and inserting ``, or'', and by adding
after subparagraph (BB) the following new subparagraph:
``(CC) section 6050U (relating to returns relating
to credit for hope scholarship and lifetime
learning).''.
(d) Clerical Amendments.--
(1) Advance payment.--The table of sections for chapter 77
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Sec. 7528. Advance payment of credit
for hope scholarship and
lifetime learning.''.
(2) Information reporting.--The table of sections for
subpart B of part III of subchapter A of chapter 61 of such
Code is amended by inserting after the item relating to section
6050S the following new item:
``Sec. 6050U. Returns relating to credit
for hope scholarship and
lifetime learning.''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S1295-1296)
Read twice and referred to the Committee on Finance.
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