ACE and five other higher education associations sent a letter today
to House Ways and Means Committee leaders urging support for extending
the tuition deduction and repealing the so-called parking tax in two
bills scheduled for committee markup Thursday.
The extension of the above-the-line deduction for qualified tuition and related expenses is included in the Taxpayer Certainty and Disaster Tax Relief Act of 2019
(H.R. 3301), while the repeal of the unrelated business income tax
(UBIT) qualified transportation benefit tax—known as the parking tax—is
included in the Economic Mobility Act of 2019 (H.R. 3300).
As ACE President Ted Mitchell explains in the
letter, the tuition deduction, which expired at the end of 2017, helps
reduce the cost of college by allowing students or their parents to
deduct up to $4,000 in eligible higher education expenses from their
taxable income.
“The tuition deduction is particularly
important to graduate students, who are ineligible for the American
Opportunity Tax Credit,” he wrote. “Regrettably, its expiration last
year means many students and families lost a valuable benefit that helps
them finance a college education.”
The good news is that the extension of the
tuition deduction in H.R. 3301 would be retroactive to the 2018 tax
year, so students and parents could recoup the taxes levied for last
year.
Meanwhile, the 2017 tax reform bill unwisely
included a provision imposing a 21-percent tax on the value of transportation and parking benefits that
tax-exempt nonprofits, including colleges and universities, provide to their employees.
“This misguided tax should be repealed as it
imposes significant new costs and administrative burdens on colleges and
universities, which will harm students and families by driving up the
cost of college,” Mitchell wrote.
The repeal of the parking tax included in H.R. 3300 also would be retroactive.
The letter urges Congress to act swiftly to both extend the tuition deduction and repeal the parking tax.