Sec. 137502. Treatment of Federal Pell Grants for income tax purposes
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Section 117(b)(1) is amended by striking means any amount and all that follows and inserting means— any amount received by an individual 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, and any amount received by an individual after December 31, 2021, and before January 1, 2026, as a Federal Pell Grant under section 401 of the Higher Education Act of 1965. .
Section 25A(g)(2) is amended— in subparagraph (A), by inserting described in section 117(b)(1)(A) after a qualified scholarship , and in subparagraph (C), by inserting or amount described in section 117(b)(1)(B) after within the meaning of section 102(a) . The amendment made by this section shall apply to taxable years beginning after December 31, 2021.