[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2543 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 2543
To amend the Internal Revenue Code of 1986 to expand the exclusion of
Pell Grants from gross income, and for other purposes.
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IN THE HOUSE OF REPRESENTATIVES
April 1, 2025
Mr. Doggett (for himself, Mr. Kelly of Pennsylvania, Mr. Davis of
Illinois, and Mr. Feenstra) introduced the following bill; which was
referred to the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to expand the exclusion of
Pell Grants from gross income, and for other purposes.
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 ``Tax-Free Pell Grant Act''.
SEC. 2. EXPANSION OF PELL GRANT EXCLUSION FROM GROSS INCOME.
(a) In General.--Section 117(b)(1) of the Internal Revenue Code of
1986 is amended by striking ``received by an individual'' and all that
follows and inserting ``received by an individual--
``(A) as a scholarship or fellowship grant to the
extent the individual establishes that, in accordance
with the conditions of the grant, such amount was used
for qualified tuition and related expenses, or
``(B) as a Federal Pell Grant under section 401 of
the Higher Education Act of 1965 (as in effect on the
date of the enactment of the Tax-Free Pell Grant
Act).''.
(b) No Adjustment Under American Opportunity and Lifetime Learning
Credits.--Section 25A(g)(2)(A) of such Code is amended by striking ``a
qualified scholarship which'' and inserting ``a qualified scholarship
which is described in section 117(b)(1)(A) and which''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 3. EXPANSION OF AMERICAN OPPORTUNITY AND LIFETIME LEARNING
CREDITS.
(a) In General.--Section 25A of the Internal Revenue Code of 1986
is amended--
(1) in subsection (f)(1)--
(A) in subparagraph (A), by striking ``tuition and
fees'' and inserting ``tuition, fees, computer or
peripheral equipment, child and dependent care
expenses, and course materials'',
(B) by striking subparagraph (D), and
(C) by adding at the end the following new
subparagraphs:
``(D) Child and dependent care expenses.--For
purposes of this paragraph--
``(i) In general.--The term `child and
dependent care expenses' means amounts paid for
the following expenses, but only if such
expenses are incurred to enable the taxpayer to
be enrolled in an eligible educational
institution for any period for which there are
1 or more qualifying individuals with respect
to the taxpayer:
``(I) expenses for household
services, and
``(II) expenses for the care of a
qualifying individual.
Such term shall not include any amount paid for
services outside the taxpayer's household at a
camp where the qualifying individual stays
overnight.
``(ii) Qualifying individual.--The term
`qualifying individual' has the meaning given
such term in section 21(b)(1).
``(iii) Exception, dependent care
centers.--Rules similar to the rules of
subparagraphs (B), (C), and (D) of section
21(b)(2) shall apply, except the term `child
and dependent care expenses' shall be
substituted for the term `employment-related
expenses' each place it appears in such
subparagraphs.
``(E) Child and dependent care expenses only
qualified expenses when claimed by eligible student.--
Amounts paid for an expense described in subparagraph
(E) may not be taken into account under this paragraph
for a taxable year unless required for the enrollment
or attendance of an individual described in
subparagraph (A)(i) or subparagraph (A)(ii).
``(F) Computer or peripheral equipment.--
``(i) Defined.--For purposes of this
paragraph, the term `computer or peripheral
equipment' means expenses for the purchase of
computer or peripheral equipment (as defined in
section 168(i)(2)(B), computer software (as
defined in section 197(e)(3)(B))), or internet
access and related services, if such equipment,
software, or services are to be used primarily
by the individual during any of the years the
individual is enrolled at an eligible
educational institution.
``(ii) Dollar limit on amount creditable.--
The aggregate of the amounts paid or expenses
incurred for computer or peripheral equipment
which may be taken into account under this
paragraph for a taxable year by the taxpayer
shall not exceed $1,000.'', and
(2) in subsection (g)(5)--
(A) in the heading, by adding ``or credit'' at the
end, and
(B) by inserting ``or credit'' after ``a
deduction''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
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