Expansion of Pell Grant exclusion from gross income

(a) In general Section 117(b)(1) 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 this subparagraph).. (b) No adjustment under American Opportunity and Lifetime Learning Credits Section 25A(g)(2)(A) 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, 2025.