Allows an income tax credit under the Internal Revenue Code for the expenses of higher education, including postsecondary trade and vocational schools, paid by the taxpayer during the taxable year for the higher education of any individual in the following amounts: (1) 100 percent of so much of the expenses as does not exceed $200, and (2) 50 percent of the expenses as exceeds $200 but does not exceed $500. Provides for the proration of such credit between taxpayers where more than one taxpayer pays the expenses. States that the amounts otherwise taken into account for determination of such credit shall be reduced by the amount of any scholarships, fellowship grants, or veterans' educational benefits received during the taxable year.