ADEA Washington Update

Tax Reform Moves Forward

(ACA, Legislation, Senate, Education, Graduate Students, Higher Education) Permanent link   All Posts

The Senate passed a sweeping overhaul of the tax code in the early morning hours of Dec.  2., moving one step closer to sending the bill to President Trump’s desk for his signature. The Senate bill passed 51-49 along party lines with just one Republican, Sen. Bob Corker (R-TN), voting against it.  Before it goes to the President, congressional leaders will have to resolve differences between the Senate bill and legislation the House passed last month.


The House version of the Tax Cuts and Jobs Act (H.R. 1) would make several changes to the treatment of educational expenses that are of great concern to academic dentistry and we have joined with other groups to oppose them.  Those include a reconfiguration of the American Opportunity Tax Credit and the elimination of the Hope Scholarship Credit and the Lifetime Learning Credit. It also repeals the itemized deduction for student loan interest, and the tuition and related expenses deduction.  Beyond these it would repeal the provision that allows educational institution to provide free tuition to employees and the ability of employers to provide education assistance tax free.  The result is that the amount provided by these two benefits would be considered ordinary income to the employee. In addition, the House bill would add a 1.4% excise tax in certain instances on the net investment income of private colleges and universities with at least 500 students.

The Senate version of the same bill does not include any of these changes to the education provisions, but does include some version of other provisions included by the House that are of concern for higher education including, the doubling of the standard deduction for individuals and couples, which would reduce the incentive for taxpayers to itemize their deductions. Itemized deductions include charitable giving, which would be curtailed without the income offsetting tax incentive. 

The Senate bill includes the repeal of the penalty payments imposed under the individual mandate on those who do not have health insurance.  This provision according to a Congressional Budget Office (CBO) analysis, repealing the individual mandate would result in some 13 million more people being uninsured by 2027.

This information is current as of date of publication.

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