Tax-Free Pell Grant Act

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 2543 Introduced in House (IH)] <DOC> 119th CONGRESS 1st Session H. R. 2543 To amend the Internal Revenue Code of 1986 to expand the exclusion of Pell Grants from gross income, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES April 1, 2025 Mr. Doggett (for himself, Mr. Kelly of Pennsylvania, Mr. Davis of Illinois, and Mr. Feenstra) introduced the following bill; which was referred to the Committee on Ways and Means _______________________________________________________________________ A BILL To amend the Internal Revenue Code of 1986 to expand the exclusion of Pell Grants from gross income, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax-Free Pell Grant Act''. SEC. 2. EXPANSION OF PELL GRANT EXCLUSION FROM GROSS INCOME. (a) In General.--Section 117(b)(1) of the Internal Revenue Code of 1986 is amended by striking ``received by an individual'' and all that follows and inserting ``received by an individual-- ``(A) as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses, or ``(B) as a Federal Pell Grant under section 401 of the Higher Education Act of 1965 (as in effect on the date of the enactment of the Tax-Free Pell Grant Act).''. (b) No Adjustment Under American Opportunity and Lifetime Learning Credits.--Section 25A(g)(2)(A) of such Code is amended by striking ``a qualified scholarship which'' and inserting ``a qualified scholarship which is described in section 117(b)(1)(A) and which''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2024. SEC. 3. EXPA