Education, Achievement, and Opportunity Act
The Education, Achievement, and Opportunity Act would create a new refundable tax credit (designated as section 36C) for elementary and secondary education expenses paid for each qualifying child of the taxpayer. The credit would cover up to $10,000 per child per year for qualified education expenses, and it would be available for both public and private (including religious) K–12 schools. The amount is partially phased out based on modified adjusted gross income (MAGI): the credit is reduced by $50 for each $1,000 (or fraction) by which MAGI exceeds $150,000 for joint filers or $75,000 for other filers, until it reaches zero. Qualified expenses include tuition and fees, plus up to $1,500 of certain non-tuition items (like computers, educational software, tutoring, special needs services, transportation fees to a private school if the school charges for transportation, and academic testing services); nonacademic fees such as activities, athletics, uniforms, and similar items are excluded. The bill also adjusts credits for Coverdell savings account distributions to avoid double counting, and it applies to taxable years beginning after enactment.
Key Points
- 1New refundable credit: Creates a per-child tax credit (36C) for elementary and secondary education expenses, payable against taxes and refundable if it exceeds tax liability.
- 2Per-child cap: Up to $10,000 credit per qualifying child per tax year.
- 3MAGI-based phaseout: Credit is reduced by $50 for each $1,000 (or fraction) by which MAGI exceeds $150,000 for joint filers or $75,000 for others; phases out to zero.
- 4Eligible expenses: Includes tuition and required fees plus up to $1,500 of specified non-tuition costs (computers/software, tutoring, special needs services, certain transportation fees, and academic testing); excludes nonacademic fees such as activities, uniforms, and sports.
- 5Qualified institutions: Applies to public, charter, private, parochial, or religious elementary or secondary schools (K–12), regardless of religious affiliation.
- 6Interaction with other tax provisions: Adjusts the credit amount if Coverdell Education Savings Account distributions were used for the same expenses to avoid double counting.
- 7Effective date: Applies to taxable years beginning after the date of enactment.