Section 1 Short title
This Act may be cited as the “College Tuition and Debt Relief Act of 2014”.
College Tuition and Debt Relief Act of 2014
A BILL
To amend the Internal Revenue Code of 1986 to increase and extend the American Opportunity Tax Credit and to increase the student loan interest deduction.
Sec. 2 American Opportunity Tax Credit increase and extension
Credit made permanent— Section 25A(i) of the Internal Revenue Code of 1986 is amended by striking “and before 2018”.
Increase in credit amount— Paragraph (1) of section 25A(i) of the Internal Revenue Code of 1986 is amended—
in subparagraph (A) by striking “$2,000” and inserting “$2,500”, and
in subparagraph (B) by striking “as exceeds $2,000 but does not exceed $4,000” and inserting “as exceeds $2,500 but does not exceed $4,500”.
Adjustment for inflation— Section 25A(i) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(7) Adjustments for inflation—In the case of a taxable year beginning after December 31, 2015, each of the dollar amounts in subparagraph (A) and (B) of paragraph (1) and clause (ii) of paragraph (4)(A) shall be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(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 “calendar year 2014” for “calendar year 1992” in subparagraph (B) thereof.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
Sec. 3 Student loan interest deduction increase
In general— Paragraph (1) of section 221(b) of the Internal Revenue Code of 1986 is amended to read as follows:
“(1) In general—Except as provided in paragraph (2), the deduction allowed by subsection (a) for the taxable year shall not exceed $5,000.”
Adjustment for inflation—
In general— Section 221(f) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph:
“(2) Adjustment for inflation—In the case of a taxable year beginning after December 31, 2015, the $5,000 dollar amount in paragraph (1) shall be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(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 “calendar year 2014” for “calendar year 1992” in subparagraph (B) thereof.”
Conforming amendment— Section 221(f)(3) of the Internal Revenue Code of 1986, as redesignated by paragraph (1), is amended to read as follows:
“(3) Rounding
“(A) Modified adjusted gross income thresholds—If any amount as adjusted under paragraph (1) is not a multiple of $5,000, such amount shall be rounded to the next lowest multiple of $5,000.
“(B) Deduction limitation—If any amount as increased under paragraph (2) is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.