Middle Class College Tuition Tax Credit Expansion Act of 2016

Middle Class College Tuition Tax Credit Expansion Act of 2016

This bill amends the Internal Revenue Code to replace the Hope Scholarship and Lifetime Learning tax credits with a new American Opportunity Tax Credit that:

• allows an increased income tax credit for the qualified tuition and related expenses of a student who is carrying at least one half of a normal course load,
• increases the income threshold for reductions in the credit amount based upon modified adjusted gross income,
• allows a lifetime dollar limitation on such credit of $25,000 for all taxable years,
• prohibits taxpayers who have fraudulently or recklessly claimed the credit from receiving the credit during a specified disallowance period, and
• makes 50% of the credit refundable.

The bill also allows an exclusion from gross income of any amount received as a Federal Pell Grant.