Lawmakers Want to Revisit Tax Issue
Two years after enactment of major new higher education tax credits, some African American lawmakers are calling for a new tax deduction to reflect college tuition payments.
The bill, H.R. 1188, would allow families to deduct annually up to $10,000 per individual and $20,000 per taxpayer. Payments of tuition and related expenses would qualify for the break.
Reps. Sheila Jackson-Lee (D-Texas), Ed Towns (D-N.Y.), Eva Clayton (D-Fla.), and Del. Eleanor Holmes Norton (D-D.C.) have joined the effort, which includes 16 sponsors. Rep. Gary Ackerman (D-N.Y.) is the prime sponsor of the proposal.
The new program, if enacted, would begin with tax year 1999.
In 1997, President Clinton created the HOPE Scholarship program, a tax credit offering $1,500 to cover tuition costs for freshmen and sophomores. That package also contained a lifelong learning tax credit, equal to 20 percent of tuition costs for students in other years of post-secondary study.
Under current law, taxpayers also may deduct up to $1,500 a year in interest on education loans, and this amount will increase gradually to $2,500 annually in two years. However, the new bill would provide considerably more aid — in effect, allowing families to deduct the full costs charged by many colleges.
The bill was referred to the House Ways and Means Committee, which is responsible for setting tax policy.
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