Generating Opportunity by Forgiving Educational Debt for Service Act of 2005

Generating Opportunity by Forgiving Educational Debt for Service Act of 2005 - Amends the Internal Revenue Code to exclude from gross income student loan repayments by the federal government on behalf of federal employees and members of the Armed Forces on active duty. Exempts such repayments from social security taxes.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1255 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1255

To amend the Internal Revenue Code of 1986 to exclude from gross income 
 amounts paid on behalf of Federal employees and members of the Armed 
  Forces on active duty under Federal student loan repayment programs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 16, 2005

Mr. Voinovich (for himself, Mr. Akaka, Ms. Collins, Mr. Durbin, and Mr. 
   Stevens) 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 exclude from gross income 
 amounts paid on behalf of Federal employees and members of the Armed 
  Forces on active duty under Federal student loan repayment programs.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Generating Opportunity by Forgiving 
Educational Debt for Service Act of 2005''.

SEC. 2. EXCLUSION FOR STUDENT LOAN REPAYMENTS BY THE FEDERAL 
              GOVERNMENT.

    (a) Exclusion From Gross Income.--Section 108(f) of the Internal 
Revenue Code of 1986 (relating to student loans) is amended by adding 
at the end the following:
            ``(5) Student loan repayments by federal government.--In 
        the case of an individual, gross income does not include any 
        payments made by the Federal Government on behalf of such 
        individual under--
                    ``(A)(i) section 5379 of title 5, United States 
                Code; or
                    ``(ii) any other similar Federal program for its 
                employees; or
                    ``(B) section 510(e)(2), chapter 109, or chapter 
                1609 of title 10, United States Code.''.
    (b) Exclusion From Wages.--
            (1) In general.--Section 3121(a) of such Code (defining 
        wages) is amended--
                    (A) in paragraph (21), by striking ``or'' at the 
                end;
                    (B) in paragraph (22), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by inserting after paragraph (22) the 
                following:
            ``(23) any payment excluded from gross income under section 
        108(f)(5) (relating to student loan repayments by the Federal 
        Government).''.
            (2) Social security act.--Section 209(a) of the Social 
        Security Act (42 U.S.C. 409(a)) is amended by adding at the end 
        the following:
            ``(20) Any payment excluded from gross income under section 
        108(f)(5) of the Internal Revenue Code of 1986 (relating to 
        student loan repayments by Federal Government).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made on or after the date of enactment of this Act in 
taxable years ending after such date.
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