Senate Passes Renewal Of Schumer's College Tuition Tax Deduction That Saves Middle Class Families Thousands Of Dollars Every School Year

Senate Passes Renewal Of Schumer's College Tuition Tax Deduction That Saves Middle Class Families Thousands Of Dollars Every School Year

U.S. Senator Charles E. Schumer announced that a two-year extension of the Schumer-authored "College Tuition Tax Deduction" was approved by the Senate early this morning. Schumer said this tax deduction is needed now more than ever as college tuition costs have skyrocketed. The deduction, which expired at the beginning of this year, saves middle class families across the country thousands of dollars every year by allowing them to deduct up to $4,000 in college tuition expenses from their taxes. In October, Schumer personally lobbed outgoing- Majority Leader Senator Bill Frist to bring legislation to extend the tax break to the Senate floor during the current lame duck session.

"Middle class families across the country have come to depend on this deduction can now breathe a sigh of relief," Schumer said. "To hard-working New York parents, skyrocketing tuition costs mean debt and second mortgages. They mean lost family vacations and hard choices about how many children can be sent to school. The college tuition tax deduction makes these choices a little easier by saving families thousands of dollars every year and I am proud to have led the fight preserve it."

The college tuition tax deduction, passed into law in 2001 and based on bi-partisan legislation written by Schumer, originally allowed middle-income families to deduct $3,000 from their tax return. The deduction was raised to $4,000 a year in 2004. Last year, single filers who made up to $65,000 a year and married couples with incomes up to $130,000 qualified for the tuition deduction. There was also a smaller, $2,000 deduction for those who earned more. According to the Internal Revenue Service, in 2003, 3.6 million families took advantage of the deduction, saving them about $4.5 billion

However, in May, language extending the tax break for another three years was eliminated from the tax reconciliation bill in favor of restoring $5 billion worth of tax breaks of the major oil companies. In legislation passed late last night, Congress renewed the lapsed tax break for 2006 and extended it through the end of 2007. So come tax time in April, families can rest assured that they will be able to take a deduction on this year's tuition expenses.

Schumer is also the author of the bi-partisan "Make College Affordable Act" (S. 759) which would increase the maximum amount of tuition costs that can be deducted to $12,000 each year. In addition, the bill would help college graduates pay off their loans by offering a tax deduction of up to $1,500 for interest paid on student loans over the first five years of repayment. The full deduction would apply to single filers with incomes up to $50,000 and joint filers with incomes up to $100,000. The legislation would still allow parents to choose Hope Scholarships instead of the tax deduction, based on which works best for them.

http://schumer.senate.gov/SchumerWebsite/pressroom/record.cfm?id=266828&&year=2006&