article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Educational Opportunity for All Act of 2005''. SEC. 2. EDUCATIONAL OPPORTUNITY FOR ALL TAX CREDIT. (a) In General.--Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section: ``SEC. 36. EDUCATIONAL OPPORTUNITY TAX CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--There shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the qualified tuition expenses paid by the taxpayer during the taxable year (for education furnished during any academic period beginning in such taxable year). ``(2) Per student limitation.--The credit allowed under this section shall not exceed $4,000 with respect to any individual. ``(b) Election Not to Have Section Apply.--A taxpayer may elect not to have this section apply with respect to the qualified tuition expenses of an individual for any taxable year. ``(c) Definitions.--For purposes of this section-- ``(1) Qualified tuition expenses.-- ``(A) In general.--The term `qualified tuition expenses' means tuition required for the enrollment or attendance of-- ``(i) the taxpayer, ``(ii) the taxpayer's spouse, or ``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, at an eligible educational institution for courses of instruction of such individual at such institution. ``(B) Exception for education involving sports, etc.--Such term does not include expenses with respect to any course or other education involving sports, games, or hobbies, unless such course or other education is part of the individual's degree program. ``(C) Exception for nonacademic fees.--Such term does not include student activity fees, athletic fees, insurance expenses, or other fees or expenses unrelated to an individual's academic course of instruction. ``(D) Job improvement included.--Such term shall include tuition expenses described in subparagraph (A) with respect to any course of instruction at an eligible educational institution to acquire or improve job skills. ``(2) Eligible educational institution.--The term `eligible educational institution' means an institution-- ``(A) which is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of the Taxpayer Relief Act of 1997, and ``(B) which is eligible to participate in a program under title IV of such Act. ``(d) Special Rules.-- ``(1) Identification requirement.--No credit shall be allowed under subsection (a) to a taxpayer with respect to the qualified tuition expenses of an individual unless the taxpayer includes the name and taxpayer identification number of such individual on the return of tax for the taxable year. ``(2) Adjustment for certain scholarships, etc.--The amount of qualified tuition expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced by the sum of any amounts paid for the benefit of such individual which are allocable to such period as-- ``(A) a qualified scholarship which is excludable from gross income under section 117, ``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or under chapter 1606 of title 10, United States Code, and ``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for such individual`s educational expenses, or attributable to such individual's enrollment at an eligible educational institution, which is excludable from gross income under any law of the United States. ``(3) Treatment of expenses paid by dependent.--If a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins-- ``(A) no credit shall be allowed under subsection (a) to such individual for such individual's taxable year, and ``(B) qualified tuition expenses paid by such individual during such individual's taxable year shall be treated for purposes of this section as paid by such other taxpayer. ``(4) Treatment of certain prepayments.--If qualified tuition expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first 3 months following such taxable year, such academic period shall be treated for purposes of this section as beginning during such taxable year. ``(5) Denial of double benefit.--No credit shall be allowed under this section for any expense for which a deduction is allowed under any other provision of this chapter. ``(6) Coordination with hope scholarship and lifetime learning credits.--The qualified tuition and related expenses with respect to an individual for whom a Hope Scholarship Credit or the Lifetime Learning Credit under section 25A is allowed for the taxable year shall not be taken into account under this section. ``(7) No credit for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(8) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. ``(e) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit.''. (b) Refundability of Credit.--Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period ``or enacted by the Educational Opportunity for All Act of 2005''. (c) Conforming Amendments.-- (1) Sections 135(d)(2)(A), 222(c)(2)(A), 529(c)(3)(B)(v)(II), and 530(d)(2)(C)(i)(II) of the Internal Revenue Code of 1986 are each amended by inserting ``or section 36'' after ``section 25A'' each place it appears. (2) Section 6213(g)(2)(J) of such Code is amended by inserting ``or section 36(d)(1)'' after ``expenses)''. (3) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 36 and inserting the following: ``Sec. 36. Educational opportunity tax credit. ``Sec. 37. Overpayments of tax.''. (d) Effective Date.--The amendments made by this section shall apply to expenses paid after December 31, 2004, for education furnished in academic periods beginning after such date.
summary: Educational Opportunity for All Act of 2005 - Amends the Internal Revenue Code to allow a refundable tax credit for qualfied tuition expenses. Defines "qualified tuition expenses" as tuition required for the enrollment of the taxpayer, the taxpayer's spouse or dependents at an institution of higher learning. Limits the annual amount of such credit to $4,000 per student.