Washington (Feb. 12, 2004) -- Senate Finance Committee chair Chuck Grassley, R-Iowa, has introduced two new tax-related education bills that would make permanent a series of education tax incentives that he helped enact in 2001 and 2002.
The first bill is the Lower Expenses for Students Seeking Opportunities Now Act, which makes permanent the college tuition tax deduction that was enacted as part of the 2001 tax relief law. That provision was effective only through 2005.
The second bill, the Anticipatory Initiatives for Matriculation Act, makes permanent the rest of the education tax incentives in the 2001 tax relief law, and the teacher deduction for classroom materials and continuing education costs that was included in the 2002 tax relief law. The teacher deduction expired Dec. 31, 2003. The other provisions will expire Dec. 31, 2010, if Congress takes no action.
The tax incentives include removing the limitation on the deductibility of student loan interest, improvements to education savings accounts, making distributions from pre-paid college savings plans and tuition plans tax-free, and permitting consortia of private colleges and universities to offer pre-paid tuition plans.
-- WebCPA staff
