The Ways and Means Committee of the U.S. House of Representatives is finalizing HR 1 and the full House will soon vote on it. It’s called the “Tax Cut and Jobs Act,” but as currently written this bill would eliminate federal tax breaks now available to you if you’re a current, former, or future college parent or student.
But HR 1 hasn’t become law yet. You can still influence it by telling your Representative you want these tax breaks left intact. So find your Congressperson’s contact information here and call or write immediately!
The higher education tax breaks you’ll lose if HR 1 becomes law as currently written include:
- Tuition and Fee Deduction: HR 1 would end your right to deduct up to $4,000 per year for what you pay in postsecondary tuition and fees.
- Scholarship and Fellowship Exclusion: Under HR 1 the government would tax scholarship and fellowship amounts that pay for your tuition, fees, books, and class supplies.
- Lifetime Learning and American Opportunity Tax Credits: HR 1 would eliminate the Lifetime Learning Tax Credit. For an unlimited number of years, this credit allows you to reduce your federal income taxes by up to $2,000 per student for what you pay toward tuition, required fees, books, and supplies for courses leading to a degree or to acquiring or improving job skills. To partially offset this loss, the American Opportunity Tax Credit of up to $2,500 per student would be expanded to cover five, instead of four years of these expenses — but only for at least a half-time degree or certificate-seeking student.
- Student Loan Interest Deduction: HR 1 would end your tax deduction of up to $2,500 per year on student and parent loan interest you pay.
- Employer-Provided Educational Assistance: Today the first $5,250 your employer pays on tuition, fees, books, and supplies for courses you take is excluded from what determines your federal income taxes. HR 1 would end this, and you’ll be taxed on such assistance.
- Coverdell Education Savings Accounts: HR 1 would make 2017 the last year to make new deposits into Coverdell accounts.
- College Savings Bonds: HR 1 would tax students on money they use from federal college savings bonds to pay for college.
The House votes on HR 1 soon. So if these or any of its other provisions would affect you, hurry up and exercise your rights as a citizen!
Got questions? Feel free to contact College Affordability Solutions at (512) 366-5354 or email@example.com.