Section 1 Short title
This Act may be cited as the “Extra Credit for Working Students Act of 2016”.
Extra Credit for Working Students Act of 2016
A BILL
To amend the Internal Revenue Code of 1986 to allow a temporary election to accelerate the American Opportunity Tax Credit.
Sec. 2 Accelerated American Opportunity tax credit
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.”
Study—
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.
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.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2016.