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DICK CHRYSLER
MEMBER OF CONGRESS
BTH DISTRICT, MICHIGAN
327 CANNON BUILDING
10049 E. GRAND RIVER, SUITE 900
WASHINGTON, D.C. 20515
BRIGHTON, MI 48116
(202) 225-4872
(810) 220-1002
(202) 225-3034 FAX
(810) 220-1020 FAX
INTERNET: [email protected] GOV
TOLL FREE: 800-400-6408
THE TUITION TAX DEDUCTION ACT OF 1995
Introduced hy Congressman Dick Chrysler
Legislative Summary
Purpose
H.R. 2543, the Tuition Tax Deduction Act of 1995, would amend the Internal Revenue Code to
allow an income tax deduction for tuition and fees for undergraduate and post-secondary
vocational education.
General Rule
H.R. 2543 would allow a taxpayer to deduct the cost of tuition and fees paid to post-secondary
and vocational schools from taxable income.
Limitations
$5,000 Maximum Deduction
The deduction is limited to $5,000 per taxpayer per year.
Eligible Educational Institutions
Eligible educational institutions are defined as post-secondary and vocational schools.
Additionally, to be an eligible institution, a school must certify to the Secretary of the
Treasury that its percentage increase in tuition for an academic year is within the cost-of-
living increase for the year, as measured by the Consumer Price Index (CPI).
Special Rules
Certain Scholarships and Veterans' Benefits
When calculating qualifying educational expenses, an individual must subtract the amount of
scholarships or grants excludible from a taxpayer's gross income, like Pell Grants. Student
loans would not reduce the amount of the deductible expenses.
Eligible Courses for Recognized Degrees Requirement
Only expenses paid for undergraduate courses taken for a recognized degree or certificate
qualify for this deduction.
Half-time Student Status Requirement
In order to claim the deduction, a student must carry at least half the normal full-time work
load for his or her course of study.
Dependents and Spouses
Parents can claim the deduction for educational expenses paid for a child's schooling, if the
student is a dependent. Likewise, a student taxpayer cannot take the deduction for him or
herself if he or she is a dependent of his or her parents. No deduction is allowed for
amounts paid for a taxpayer's spouse's education unless the couple files a joint tax return.
No Itemization Requirement
The tuition tax deduction is allowed whether or not a taxpayer itemizes deductions.
WASHINGTON, DC 20515-2208
) (202) 225-4872
B.
VG
FINANCIAL
ICES
(202) 225-3034 FAX
SUBCOMMITTEES
10049 EAST GRAND RIVER
GENERAL OVERSIGHT AND INVESTIGATIONS
SUITE 900
DOMESTIC AND INTERNATIONAL MONETARY POLICY
i
BRIGHTON, MI 48116
(810) 220-1002
Congress of the United States
GOVERNMENT REFORM AND
(810) 220-1020 FAX
OVERSIGHT
SUBCOMMITTEE
721 NORTH CAPITOL
house of Representatives
HUMAN RESOURCES AND INTERGOVERNMENTAL
SUITE THREE
RELATIONS
LANSING, MI 48906
(517) 484-1770
DICK CHRYSLER
SMALL BUSINESS
(517) 484-5575 FAX
8TH DISTRICT, MICHIGAN
SUBCOMMITTEES
GOVERNMENT PROGRAMS
TOLL FREE
PROCUREMENT. EXPORTS, AND BUSINESS
(800) 400-6408
OPPORTUNITIES
VICE CHAIRMAN
November 14, 1995
The President of the United States
The White House
Washington, DC 20500
Dear Mr. President:
As. we enter into discussions concerning the final tax package to be included in the budget
reconciliation bill, I wanted to make you aware of a bill that I recently introduced.
H.R. 2543, the Tuition Tax Deduction Act of 1995, would allow American taxpayers to deduct
the cost of investing in higher education, up to $5000 each year in tuition and fees, from their
income. The bill would also help control rising college costs by limiting this deduction to
qualifying educational institutions that keep the increase in their tuition rates within the cost-of-
living increase for that year.
Last year, I promised my constituents that I would pursue avenues to make higher education more
affordable and accessible for middle-class, working families. The introduction of this legislation is
one more step toward expanding education opportunities.
We are currently allowed to deduct the cost of investing in new equipment and capital
improvements. The same should be true for investments in our most important national resource:
our people.
The benefits of a Tuition Tax Deduction would create a win-win-win-win situation for everyone.
Parents win by being better able to afford sending their children to school. Students win by
having a better opportunity to attend college. Government wins by collecting greater tax revenue
from a better educated population earning higher salaries. And society as a whole wins with a
better educated, more productive population with more to contribute.
This legislation is very similar to your proposal to create a $10,000 deduction for college tuition
that was introduced earlier this year. In fact, my office has been working closely with Treasury
Department officials in crafting our legislation.
PRINTED ON RECYCLED PAPER
Mr. President, I firmly believe that the final tax package agreed upon by the White House and the
Congress should include a tuition tax deduction. We must remain committed to strengthening and
expanding educational opportunities for all Americans. A tuition tax deduction is one way we can
encourage this important investment in the future of our nation.
I hope we have the opportunity to discuss the Tuition Tax Deduction Act with you or your staff
in greater detail. My Chief of Staff, Scott Gast, will be calling to see if a meeting can be arranged.
Enclosed is further information on the legislation. Thank you in advance for your consideration.
Sincerely,
Dich
Dick Chrysler
Member of Congress
DICK CHRYSLER
8TH DISTRICT, MICHIGAN
Congress of the United States
house of Representatives
Washington, DC 20515-2208
November 16, 1995
IT'S As EASY As A B C
Co-Sponsor The Tuition Tax Deduction Act of 1995
Dear Colleague:
11 of us agree that education is the most important investment we can make in the young
A
people of today and the future generations of tomorrow. The future prosperity of
America depends on a well-educated citizenry. We have an opportunity to expand
educational opportunities and put a college education within reach of every American by
empowering working families to invest in our most precious resource: our people.
ecause the Balanced Budget Act of 1995 contains a $245 billion tax cut package, I
B
believe a tuition tax deduction should be included. President Clinton and members of this
Congress have already shown their willingness to accept such a proposal. H.R. 2543, the
Tuition Tax Deduction Act of 1995, would allow taxpayers to take up to a $5,000 deduction for
tuition and fees at institutions of higher education. Further, the legislation works to control the
escalating cost of college by making eligible only students of institutions which keep their tuition
increases at or below the inflation rate of the Consumer Price Index.
o-sponsor H.R. 2543. The legislation creates a win-win-win-win situation for everyone.
C
Parents win by being better able to afford sending their kids to school. Students win by
gaining better access to college education, leading to better jobs. Society wins through a
better educated, more productive public. Government wins by having citizens with better jobs
and higher salaries, creating a larger tax base. This legislation has bi-partisan support and
tremendous popularity among middle-class constituents. The November 14th and 16th Lansing
State Journal articles on the back of this letter highlight the broad support of this proposal.
This bill works for middle class families faced with college tuition as their fastest growing cost.
Call Paul Zurawski at 5-4872 to co-sponsor H.R. 2543 or for more information.
Sincerely,
Dick
Dick Chrysler
Member of Congress
PRINTED ON RECYCLED PAPER
11-16-95
Our Opinions
Tax break
LANSING STATE JOURNAL
Tuition deduction plan
needed, but needs work
B
righton Congressman Dick Chrysler proposes a
meaningful, $5,000 tax deduction for families
saddled with high college costs.
While it is too early to support the measure
wholeheartedly, Chrysler's instincts are right.
11-14-95
The American middle class can certainly use re-
lief from spiraling college tuitions. Middle-class fam
ilies face serious obstacles in paying for higher edu-
cation because they are often ineligible for financial
Chrysler would ease tuition
aid.
We'd feel more comfortable with Chrysler's plan
if we knew how this fits in with Republican plans to
Associated Press
Howell.
"This will be a significant saving.
balance the federal budget in the next seven years.
"This is for the
as much as a 30 percent tuition re-
If tuition deductions are made law, what will be
EAST LANSING Working fam-
illes would have help with college
duction over four years," Rogers
middle-class
the projected drain on federal revenues? Which pro-
said.
cnsts if Congress passes a tax de-
The state tax credit also is good
firams will suffer as result?
duction for tuition, U.S. Rep. Dick
families of
only at schools that keep tuition in-
The timing of Chrysler's plan coincides with the
Chrysier said Monday.
creases below inflation.
beginning of what promises to be a bruising re-elec-
Under a bill Introduced by Chrys-
America."
Reacting to criticism that wealthy
tion battle. Still, the Republican freshman does en-
ler, R-Brighton, taxpayers could de-
families can take advantage of the
duct the first $5,000 In tuition and
Rep. Dick Chrysier
tax credit. Chrysler said the Pell
joy some bipartisan support for the plan. President
fees for undergraduate and VOCE-
grant and other need-hased pro-
Clinton has supported a similar proposal.
tional education.
R-Brighton
grams will be available for low-in-
To make this work, Congress must look at the big
"Businesses can currently deduct
come students.
the cost of investing in new equip-
Although middle-class families
picture. The legislation would benefit more Ameri-
ment and capital improvements.
least half of a full-time enrollment.
face serious financial obstacles to
can families if young parents could defray future
The same should be true for an in-
Taxpayers don't need to item-
higher education, they are often in-
college costs through an IRA-like savings account.
vestment in our most important na-
ize deductions to claim the tax III-
eligible for such need-based finan-
Again, that will have an impact on federal reve-
tional resource, our people," Chrys-
Ition deduction.
cial aid, he said.
lar said during a news conference at
The measure has bipartisan sup-
MSU student Terry Lehmann, 21,
nues. How Congress would balance the books as a
M' higan State University.
port and stands a good chance of
said the tax break is a good Idea and
result is a challenge.
want to put a college education
passing in the next few weeks as
may keep students from falling into
One cost-controllin incentive under Chrysler's
within reach of every American stu-
part of the federal tax relief pack-
debt from student loans.
plan is that it would apply to students attending cal-
dant. This is for the middle-cluss
age, Chrysier said.
"With the deduction, you might
families of America."
The legislation, referred to the
not see и many students needing
leges which keep tuition increases within the annual
Under his plan:
House Ways & Means Committee.
loans." the senior from Fenton said
inflation rate. That ecuoes a recent pledge by Michi-
Only students attending Insti-
is similar to a proposal by President
"It would help me. I think it's a de-
gan State University to keep tuition increases down.
tutions that keep tuition increases
Bill Clinton.
cent Idea. It might help the people
within the annual rate of inflation
The federal tax deduction will
who would probably not be able to
It's a pledge we wish more state universities would
could take the deduction.
work in tandem with Michigan's
get financial aid"
adopt.
The student must be enrolled
$250 tax credit for college costs,
Staff writer Bob Allison contributed
Congressman Chrysler has the blueprint of a ben-
in enough classes to add up to at
said state Sen. Mike Rogers, R-
to this report.
eficial plan to aid vast numbers of families strug-
gling to put their children through college. Now he
to I
: the blueprints, and the numbers, work.
STATE OF MICHIGAN
OFFICE OF THE GOVERNOR
LANSING
JOHN ENGLER
GOVERNOR
November 9, 1995
The Honorable Dick Chrysler
The U.S. House of Representatives
Washington, Dear Congressman D.C. 20515 Chrysler:
Recently you introduced legislation amending the Internal Revenue Code to
allow a deduction from gross income for tuition and fees for undergraduate and
postsecondary vocational education. I am writing to voice my support for your
efforts.
Making education more affordable to our nation's learners is a crucial
element in our goal of building a world-class workforce. As you know, in
Michigan, wc have recently taken related efforts on this front by enacting a state
income tax credit for college tuition.
Michigan Representatives and Senators to work with you in bringing this
I am pleased to know of your legislation, Dick, and I encourage our
important bill before the Congress for prompt enactment.
Sincerely,
JhoEigh John Engler
Governor
JE/lg.bm.dc.
RECYCLED
STATE OF MICHIGAN
SENATE MAJORITY LEADER
State Capitol
SENATOR DICK POSTHUMUS
Lansing, Michigan 48913
31st District
(517) 373-0797
TDD (517) 373-0543
November 8, 1995
Congressman Dick Chrysler
U.S. House of Representatives
327 Cannon Building
Washington, DC 20515
Dear Dick:
Providing affordable and accessible opportunities in education is essential to the continued
prosperity of our nation, both economically and socially. An advanced education has proven to be
increasingly necessary for men and women to succeed in today's global market place. As elected
officials, it is our responsibility to expand opportunities in education and to encourage individuals
to improve themselves through such avenues.
Your legislation, the Tuition Tax Deduction Act, is a positive step in making higher education
more affordable for thousands of Michigan families. Here in Michigan, we have moved in a
similar direction by instituting a state tax credit for advanced and vocational education. These
two initiatives will surely compliment each other, allowing Michigan citizens the opportunity of a
higher education they might not have otherwise obtained.
I commend your efforts in bringing fiscal sanity to Washington, while not sacrificing your
commitment to higher education. You have truly kept your word by making great changes in the
way our federal government does business.
We have created a great partnership in expanding educational opportunities for the people of
Michigan, and I know with innovative proposals such as the Tuition Tax Deduction Act we will
continue to do so.
Sincerely,
Dick Posthumus
SENATE MAJORITY LEADER
Recycled
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I
104TH CONGRESS
1ST SESSION
H. R. 2543
To amend the Internal Revenue Code of 1986 to allow a deduction for
tuition and fees for undergraduate and postsecondary vocational education.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 26, 1995
Mr. CHRYSLER introduced the following bill; which was referred to the
Committee on Ways and Means
A
BILL
To amend the Internal Revenue Code of 1986 to allow a
deduction for tuition and fees for undergraduate and
postsecondary vocational education.
1
Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4
This Act may be cited as the "Tuition Tax Deduction
5 Act of 1995".
6 SEC. 2. DEDUCTION FOR TUITION AND FEES FOR UNDER-
7
GRADUATE AND POSTSECONDARY VOCA-
8
TIONAL EDUCATION.
9
(a) IN GENERAL.-Part VII of subchapter B of chap-
10 ter 1 of the Internal Revenue Code of 1986 (relating to