THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BENNINGHOFF, BAKER, BEAR, BEYER, BOYD, BROOKS, CALTAGIRONE, CAUSER, D. COSTA, DALLY, FLECK, GOODMAN, HUTCHINSON, KAUFFMAN, KILLION, PICKETT, REICHLEY, ROCK, SCAVELLO, SWANGER, THOMAS, VULAKOVICH, WALKO AND GIBBONS, FEBRUARY 6, 2009

REFERRED TO COMMITTEE ON EDUCATION, FEBRUARY 6, 2009  

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," providing for a postsecondary education tax

credit.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding an article to

read:

ARTICLE XVIII-E

POSTSECONDARY EDUCATION TAX CREDIT

Section 1801-E.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Applicant."  The taxpayer, who may be a student, who is

applying for the tax credit under section 1802-E.

"Department."  The Department of Revenue of the Commonwealth.

"Dependent."  A child who is the dependent of a claimant for

purposes of section 151 of the Internal Revenue Code of 1986

(Public Law 99-514, 26 U.S.C. § 151).

"Qualified tax liability."  The liability for taxes imposed

under Article III for the taxable year beginning after December

31, 2008, and each taxable year thereafter.

"State-related institution."  The Pennsylvania State

University, the University of Pittsburgh, Temple University,

Lincoln University and their branch campuses.

"State System of Higher Education institution."  An

institution that is a State-owned college or university as

specified under section 2002-A of the act of March 10, 1949

(P.L.30, No.14), known as the Public School Code of 1949.

"Student."  A resident student who is accepted for enrollment

in or is attending a State-related institution or State System

of Higher Education institution of postsecondary education in

this Commonwealth.

"Tax credit."  The postsecondary education tax credit.

"Taxpayer."  An individual subject to payment of taxes under

Article III.

Section 1802-E.  Application.

(a)  Application to department.--A taxpayer may submit an

application for a tax credit under this article in a manner

required by the department. The application shall contain the

following information:

(1)  The name and tax identification number of the

applicant.

(2)  The name and tax identification number of the

student for which the tax credit is being claimed.

(3)  The name of the State school or State-related

institution which the student attends.

(4)  Any other information deemed appropriate by the

department.

(b)  Procedure.--The application shall be attached to the

applicant's annual tax return required to be filed under Article

III.

Section 1803-E.  Taxpayer credit.

A taxpayer may claim a tax credit against the qualified tax

liability of the taxpayer.

Section 1804-E.  Taxpayer eligibility.

(a)  Credit.--A taxpayer shall be eligible for a tax credit

under subsection (b) against the tax imposed under Article III

if the applicant is a student or if a student is a dependent of

the applicant. A tax credit shall not be claimed more than once

on behalf of a single student in a taxable year.

(b)  Maximum credit.--A taxpayer who qualifies under

subsection (a) may claim a tax credit of $1,500.

Section 1805-E.  Carryover and carryback.

(a)  General rule.--If the taxpayer cannot use the entire

amount of the tax credit for the taxable year in which the

taxpayer is eligible for the credit, the excess may be carried

over to succeeding taxable years and used as a credit against

the qualified tax liability of the taxpayer for those taxable

years. Each time the tax credit is carried over to a succeeding

taxable year, it shall be reduced by the amount that was used as

a credit during the immediately preceding taxable year. The tax

credit provided by this article may be carried over and applied

to succeeding taxable years for no more than three taxable years

following the first taxable year for which the taxpayer was

entitled to claim the credit.

(b)  Application.--A tax credit approved by the department in

a taxable year shall first be applied against the taxpayer's

qualified liability for the current taxable year as of the date

on which the credit was approved before the tax credit can be

applied against any tax liability under subsection (a).

(c)  Limitations.--A taxpayer is not entitled to carry back,

obtain a refund of, sell or assign an unused tax credit.

Section 1806-E.  Guidelines.

The department shall adopt guidelines, including forms,

necessary to administer this article. The department may require

proof of the claim for tax credit.

Section 1807-E.  Penalty.

A taxpayer who claims a credit under this article but fails

to meet the standards under section 1804-E shall repay the full

amount of the tax credit to the Commonwealth.

Section 2.  The addition of Article XVIII-E of the act shall

apply to taxable years beginning after December 31, 2008.

Section 3.  This act shall take effect immediately.