Thousands of graduate students had staged walkouts in protest over the GOP tax plan, while eight students were arrested last week for demonstrating outside the Capitol Hill office of House Speaker Paul Ryan, R-Wis. Senate and House Republican leaders have agreed to abandon many of the controversial proposals the deduction per child, full-time tuition higher education leaders and students had rallied to thwart, according to congressional aides. Details of the final legislation are still forthcoming, but aides with knowledge of the negotiations who were not authorized to speak publicly say lawmakers have responded to the outcry from students.
In the wake of the graduate protests, a group of 31 House Republicans, led by Rep. Pete Sessions, R-Texas, sent a letter asking party leaders to strip out the tuition waiver provision. Graduate students, alongside other people with education debt, were also up in arms over a proposal to eliminate the student loan interest deduction. Because borrowers can claim the deduction even if they choose not to itemize, the tax benefit is available to anyone paying interest on education debt.
Associations representing colleges and universities have rallied in defense ofstudent tax benefits and implored lawmakers to exclude provisions they say would harm schools. Some of their efforts appear successful, including the axing of a provision that would have gotten rid of interest-free bonds that many private colleges use to fund construction on campus. But aides say lawmakers remain determined — at least for now — to impose a 1. 4 percent excise tax on the endowments of a handful of private colleges and universities. 250,000 per full-time student, while the Senate doubled the cap. A bipartisan group of nearly 30 lawmakers on Wednesday sent a letter to party leaders urging them to abandon the proposed excise tax on endowments, calling it “unprecedented” and “a serious threat to higher education institutions and their ability to provide need-based financial aid to their students.
Randi Weingarten, president of the American Federation of Teachers, said in a statement the tax overhaul “is still a terrible bill that rewards the wealthy and corporations at the expense of the middle class. But as it relates to higher education it doesn’t do quite as much damage, thanks to our members’ activism, as it did last week ,” she said. Americans can still claim the tuition and fees deduction on their 2017 tax returns. 2016 after all and the rules are unchanged. Today’s tax deductions can become next year’s wishful thinking in the blink of a congressional eye.
Some deductions teeter on a figurative tightrope from year to year as taxpayers wait to find out if Congress will renew them or they’ll expire. It’s been that way with the tuition and fees deduction. It’s an Above the Line Deduction Taxpayers were able to claim a tax deduction for the cost of college tuition and other education-related fees and expenses for their spouses, their dependents, and themselves through the end of 2016. This tuition and fees deduction was an adjustment to income that could be taken directly on the first page of Form 1040 or the shorter Form 1040A.
These “above the line” deductions are particularly advantageous because you don’t have to itemize to claim them. They also help to determine your adjusted gross income or AGI. That’s important because several other tax breaks depend on your AGI. They’re phased out or even eliminated entirely if your AGI is too high. It Was Supposed to Expire at the End of 2016 The tuition and fees deduction was scheduled to “sunset” or expire at the end of 2016 unless Congress acted to breathe new life into it, and Congress did not—at least not right away. First, there was the Tax Cuts and Jobs Act which was debated in Congress in November and December and finally signed into law on December 22, 2017.
Then Congress went back to the drawing board after the first of the year to iron out the Bipartisan Budget Act of 2018. This time the tuition and fees deduction was saved, at least for one more year. The BBA retroactively renewed it for tax year 2017 so it didn’t die at the end of 2016 after all. Where Does This Leave Tuition-Paying Taxpayers Now? You can still claim this deduction for tuition and educational fees you paid in 2017 if you qualify. Complete Form 8917 and enter the resulting number on line 34 of your Form 1040 or line 19 of Form 1040A. Qualifying Rules The deduction is available to taxpayers who paid tuition and other required fees for attending college or another post-secondary school.
Parents can deduct tuition for their child as long as the student was their dependent. The deduction can’t be claimed by married couples who file separate tax returns or by a taxpayer who can be claimed as someone else’s dependent. Expenses for courses related to sports, games, and hobbies are not deductible, even if they’re required by the school. Nor are fees for room and board, insurance, transportation, or the cost of courses that are not required to achieve a degree. Schools report your qualifying expenses to you and to the IRS on Form 1098-T. You can deduct tuition and other required fees for the tax year in which you paid them and for classes starting in the first three months of the year to follow.
The Tuition and Fees Deduction vs. And it might be easier to claim this deduction rather than one of the credits depending on your personal situation. One of the greatest advantages of the tuition and fees deduction is that it isn’t subject to some of the exacting rules that the education-related tax credits are. It’s not restricted based on what year of college you or your dependent are attending, and it doesn’t depend upon whether you’re a part-time or a full-time student. Taking even one class could qualify you for this deduction. Filing an Amended Return If you’ve already filed your 2017 tax return and didn’t claim the tuition and fees deduction because it hadn’t yet been renewed or you weren’t aware it had been reinstated, you can file an amended return. Did You Pay Interest on Student Loans?