Congress Introduces Bill to Consolidate Tax Credits for Higher Education
By Michael Cohn. A pair of lawmakers have introduced legislation to simplify the Tax Code to enable families to more easily afford the cost of higher education. Reps. Diane Black, R-Tenn., and Danny K. Davis, D-Ill., introduced the Student and Family Tax Simplification Act on Wednesday. The legislation is designed to make it easier and simpler for families to afford the costs of higher education by consolidating four separate tax provisions into a single education tax benefit.
The proposed legislation would consolidate the Hope Credit, the American Opportunity Tax Credit, the Lifetime Learning Credit, and the tuition deduction into a single, but more robust American Opportunity Tax Credit. The new AOTC would be permanent and partially refundable and would provide a 100-percent tax credit for the first $2,000 of eligible higher education expenses and a 25-percent tax credit for the next $2,000 of such expenses, for a maximum credit of $2,500. More...