Extra Credit for Working Students Act of 2016

Extra Credit for Working Students Act of 2016

This bill amends the Internal Revenue Code to allow a taxpayer to accelerate the American Opportunity Tax Credit for qualified tuition and related expenses. A taxpayer may elect to receive the full amount of the credit over the first two years of postsecondary education rather than the four-year period required under current law. Such an election is irrevocable, applies for all subsequent tax years, and may not be made for any taxable year beginning after December 31, 2022.

The Department of the Treasury must submit to Congress reports that include: the election rate, the demographics of the students making the elections, and an assessment of the effectiveness of the elections and the tax credit in improving college completion times.

[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5803 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 5803

    To amend the Internal Revenue Code of 1986 to allow a temporary 
      election to accelerate the American Opportunity Tax Credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 14, 2016

  Mr. Hardy 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 temporary 
      election to accelerate the American Opportunity Tax Credit.

    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 ``Extra Credit for Working Students 
Act of 2016''.

SEC. 2. ACCELERATED AMERICAN OPPORTUNITY TAX CREDIT.

    (a) In General.--Section 25A(i)(2) of the Internal Revenue Code of 
1986 is amended to read as follows:
            ``(2) Special rule for number of years credit allowed.--
                    ``(A) In general.--Subparagraphs (A) and (C) of 
                subsection (b)(2) shall be applied by substituting `4' 
                for `2'.
                    ``(B) Election to accelerate credit.--
                            ``(i) In general.--In the case of an 
                        eligible student with respect to whom an 
                        election to have this section apply has not 
                        been made for any prior taxable year, a 
                        taxpayer may elect for the taxable year for 
                        subparagraph (A) not to apply with respect to 
                        such student and to apply paragraph (1) by 
                        substituting `$4,000' for `$2,000' in 
                        subparagraph (A) thereof and by substituting 
                        `$4,000 but does not exceed $8,000' for `$2,000 
                        but does not exceed $4,000' in subparagraph (B) 
                        thereof.
                            ``(ii) Election irrevocable.--Once made, 
                        any such election shall be irrevocable and 
                        shall apply with respect to such student for 
                        all subsequent taxable years.
                            ``(iii) Termination.--No election may be 
                        first made under clause (i) for any taxable 
                        year beginning after December 31, 2022.''.
    (b) Study.--
            (1) In general.--Not later than the date that is 1 year 
        after the date of the enactment of this Act, and annually for 
        the 5 years thereafter, the Secretary of the Treasury shall 
        submit a report to Congress with respect to the election under 
        section 25A(i)(2)(B) of the Internal Revenue Code of 1986 to 
        accelerate the American Opportunity Tax Credit. Such report 
        shall include details on the election rate of the option and 
        the demographics of students so electing.
            (2) Report upon termination.--In the last report required 
        to be submitted under paragraph (1), the Secretary of the 
        Treasury shall include an assessment of the effectiveness of 
        such election at improving college completion times and the 
        effectiveness of the American Opportunity Tax Credit, in 
        general, at helping students to complete college on time.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.
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