A bill to amend the Internal Revenue Code of 1954 to allow a credit against income tax to individuals for certain expenses incurred in higher education.

Allows an income tax credit under the Internal Revenue Code for the amount of expenses paid for higher education in the taxable year for education above the twelfth grade paid for by the taxpayer for himself or any other individual.

Provides that such credit shall be an amount equal to the sum of: (1) 100 percent of so much of such expenses as does not exceed $200; (2) 75 percent of so much of such expenses as exceeds $200 but does not exceed $500; and (3) 25 percent of so much of such expenses as exceed $500 but does not exceed $1,500.

Provides for a reduction of such credit by 1 percent of the amount by which the taxpayer's adjusted gross income exceeds $22,500.

Defines expenses of higher education as: (1) tuition and fees required for the enrollment or attendance of a student at a level above the twelfth grade at an institution of higher education; and (2) fees, books, supplies, and equipment required for courses of instruction above the twelfth grade at an institution of higher education.

Provides that the amount of higher education expenses taken into consideration shall be reduced by any amounts received as a scholarship or fellowship grant or as veterans' benefits.