article: SECTION 1. SHORT TITLE. This Act may be cited as the ``American Opportunity Tax Credit Extension Act of 2010''. SEC. 2. INCREASES IN HOPE SCHOLARSHIP CREDIT MADE PERMANENT. (a) In General.--Subparagraphs (A) and (B) of section 25A(b)(1) of the Internal Revenue Code of 1986 (relating to Hope Scholarship Credit) are amended to read as follows: ``(A) 100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $2,000, plus ``(B) 25 percent of such expenses so paid as exceeds $2,000 but does not exceed the applicable limit.''. (b) Credit Allowed for First 4 Years of Post-Secondary Education.-- Subparagraphs (A) and (C) of section 25A(b)(2) of such Code are amended by striking ``2'' each place it appears and inserting ``4''. (c) Qualified Tuition and Related Expenses To Include Required Course Materials.--Subparagraph (A) of section 25A(f)(1) of such Code is amended by striking ``and fees'' and inserting ``, fees, and course materials''. (d) Increase in AGI Limits.-- (1) In general.--Paragraph (2) of section 25A(d) of such Code is amended to read as follows: ``(2) Amount of reduction.-- ``(A) Hope scholarship credit.--In the case of the Hope Scholarship Credit, the amount determined under this paragraph is the amount which bears the same ratio to the credit which would be determined under subsection (a)(1) (without regard to this subsection) as-- ``(i) the excess of-- ``(I) the taxpayer's modified adjusted gross income for such taxable year, over ``(II) $80,000 ($160,000 in the case of a joint return), bears to ``(ii) $10,000 ($20,000 in the case of a joint return). ``(B) Lifetime learning credit.--In the case of the Lifetime Learning Credit, the amount determined under this paragraph is the amount which bears the same ratio to the credit which would be determined under subsection (a)(2) (without regard to this subsection) as-- ``(i) the excess of-- ``(I) the taxpayer's modified adjusted gross income for such taxable year, over ``(II) $40,000 ($80,000 in the case of a joint return), bears to ``(ii) $10,000 ($20,000 in the case of a joint return).''. (2) Conforming amendments to inflation adjustments.-- (A) Amount of credit.--Subparagraph (A) of section 25A(h)(1) of such Code is amended-- (i) by striking ``2001'' and inserting ``2010'', (ii) by striking ``calendar year 2000'' and inserting ``calendar year 2009'', and (iii) by striking ``$1,000'' and inserting ``$2,000''. (B) Income limits.-- (i) Paragraph (2) of section 25A(h) of such Code is amended by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively, and by inserting before subparagraph (B) (as so redesignated) the following new subparagraph: ``(A) Hope scholarship credit.--In the case of a taxable year beginning after 2010, the $80,000 and $160,000 amounts in subsection (d)(2)(A) shall each be increased by an amount equal to-- ``(i) such dollar amount, multiplied by ``(ii) 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 2009' for `calendar year 1992' in subparagraph (B) thereof.''. (ii) Subparagraph (B) of section 25A(h)(2) of such Code, as redesignated by clause (i), is amended-- (I) by striking ``In General'' in the heading and inserting ``Lifetime Learning Credit'', and (II) by striking ``subsection (d)(2)'' and inserting ``subsection (d)(2)(B)''. (C) Rounding.--Subparagraph (C) of section 25A(h)(2) of such Code, as redesignated by subparagraph (B)(i), is amended by inserting ``or (B)'' after ``subparagraph (A)''. (e) Credit Allowed Against Minimum Tax, Etc.-- (1) In general.--Subsection (i) of section 25A of such Code is amended by striking paragraphs (1), (2), (3), (4), and (7) and by redesignating paragraphs (5) and (6) as paragraphs (1) and (2), respectively. (2) Paragraph (2) of section 25A(i) of such Code, as redesignated by paragraph (1), is amended-- (A) by striking ``paragraph (4)'' and inserting ``subsection (d)'', and (B) by striking ``paragraph (5)'' and inserting ``paragraph (1)''. (3) The heading for such subsection (i) is amended to read as follows: ``(i) Hope Scholarship Credit Allowed Against Minimum Tax; Portion of Credit Made Refundable.--''. (f) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2010.
summary: American Opportunity Tax Credit Extension Act of 2010 - Amends the Internal Revenue Code, with respect to the Hope Scholarship tax credit, to: (1) make permanent increases in the amount of such tax credit; (2) allow such credit for the first four years of post-secondary education (currently, first two years); (3) include course materials in the definition of qualified tuition and related expenses for purposes of such credit; (4) increase adjusted gross income levels for purposes of determining eligibility for such credit and the lifetime learning tax credit; and (5) allow such credit as an offset against the alternative minimum tax (AMT).