Tax-Free Pell Grant Act: Exclusion from Gross Income
This bill amends the Internal Revenue Code of 1986 to exclude Federal Pell Grants from gross income. It separates Pell Grants from the requirement that scholarship funds must be used for qualified tuition and related expenses to be tax-exempt. Additionally, the bill establishes that Pell Grants shall not reduce the amount of qualified expenses used to calculate the American Opportunity and Lifetime Learning tax credits. These amendments apply to taxable years beginning after December 31, 2022.
Key points
Federal Pell Grants are excluded from gross income under the Internal Revenue Code.
Pell Grants will no longer reduce the qualified expenses used to calculate the American Opportunity and Lifetime Learning tax credits.
The amendments apply to taxable years beginning after December 31, 2022.
Expired
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