Ill STAT. 806 PUBLIC LAW 105-34—AUG. 5, 1997 to the taxpayer or any other person under section 25A with respect to such expenses.". (e) CLERICAL AMENDMENT. —The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25 the following new item: "Sec. 25A. Higher education tuition and related expenses.". 26 USC 25A note. (f) EFFECTIVE DATES. — (1) IN GENERAL.— The amendments made by this section shall apply to expenses paid after December 31, 1997 (in taxable years ending after such date), for education furnished in academic periods beginning after such date. (2) LIFETIME LEARNING CREDIT.—Section 25A(a)(2) of the Internal Revenue Code of 1986 shall apply to expenses paid after June 30, 1998 (in taxable years ending after such date), for education furnished in academic periods beginning Eifter such dates. SEC. 202. DEDUCTION FOR INTEREST ON EDUCATION LOANS. (a) IN GENERAL. — Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 221 as section 222 and by inserting after section 220 the following new section: ••SEC. 221. INTEREST ON EDUCATION LOANS. "(a) ALLOWANCE OF DEDUCTION.— In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan. "(b) MAXIMUM DEDUCTION.— "(1) IN GENERAL. —Except as provided in paragraph (2), the deduction allowed by subsection (a) for the taxable year shall not exceed the amount determined in accordance with the following table: ••In the case of taxable years The dollar beginning in: amount is: 1998 $1,000 1999 $1,500 2000 $2,000 2001 or thereafter $2,500. "(2) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.— "(A) IN GENERAL.—The amount which would (but for this paragraph) be allowable as a deduction under this section shall be reduced (but not below zero) by the Eunount determined under subparagraph (B). "(B) AMOUNT OF REDUCTION.— The amount determined under this subparagraph is the amount which bears the same ratio to the amount which would be so taken into account as— "(i) the excess of— "(I) the taxpayer's modified adjusted gross income for such taxable year, over "(II) $40,000 ($60,000 in the case of a joint return), bears to "(ii) $15,000.
�
