To amend the Internal Revenue Code of 1986 to modify the limitation on the deduction for college tuition and related expenses and to make the deduction permanent.

February 17, 2005

Mrs. KELLY introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to modify the limitation on the deduction for college tuition and related expenses and to make the deduction permanent.

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 `More Money for College Act'.

SEC. 2. DEDUCTION FOR COLLEGE TUITION AND RELATED EXPENSES.

(a) Repeal of Dollar Limitation and Imposition of Income Limitation- Section 222 of the Internal Revenue Code of 1986 (relating to qualified tuition and related expenses) is amended by striking subsection (b) and by inserting after subsection (a) the following new subsection:

`(b) Limitation-

`(1) IN GENERAL- No deduction shall be allowed under subsection (a) in the case of any taxpayer whose modified adjusted gross income for the taxable year exceeds $80,000 (twice such amount in the case of a joint return).

`(2) MODIFIED ADJUSTED GROSS INCOME- For purposes of the preceding sentence, the term `modified adjusted gross income' means adjusted gross income determined--

`(A) without regard to this section and sections 199, 911, 931, and 933, and

`(B) after application of sections 86, 135, 137, 219, 221, and 469.

`(3) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2005, the dollar amount in paragraph (1) shall be increased by an amount equal to the product of--

`(A) such dollar amount, and

`(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `2004' for `1992' in subparagraph (B) thereof.

If any increase determined under the preceding sentence is not a multiple of $500, such increase shall be rounded to the nearest multiple of $500.'.

(b) Repeal of Termination Clause- Section 222 of such Code is amended by striking subsection (e).

(c) Effective Date- The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2004.

(d) Provision Made Permanent- Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 (relating to sunset of provisions of such Act) shall not apply to section 431 of such Act.

END