Yesterday, the U.S. House of Representatives passed a $1.5 trillion extension of the 2001/2003 expiring tax provisions originally enacted under President George W. Bush, including several related to higher education. The Middle Class Tax Relief Act of 2010 would make permanent IRC Sec. 127 - employer-provided education assistance - for both graduate and undergraduate course work, and permanently extend the improvements made to the student loan interest deduction and Coverdell Education Saving Accounts.
Shortly after the bill passed the House, Senate Finance Chairman Max Baucus introduced his version of the tax bill, which will become the Senate bill. The Baucus bill includes the same permanent extension of the 2001/2003 provisions, plus a permanent extension of the American Opportunity Tax Credit (enacted in 2008 in economic stimulus legislation), and a two-year extension of the already expired 2009 IRA charitable rollover and tuition deduction provisions.
Both bills include new income cap limits of $250,000, which will be the most controversial part of the legislation, but will have no effect on the higher education provisions, unless the controversy becomes so great that the bills collapse.
The Senate bill will likely become the main vehicle in the days ahead. Stayed tuned for more updates from NAICU as legislation moves ahead.
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