Roth Releases Education Savings Proposal
Committee Will Take Up Chairman's Mark Wednesday
WASHINGTON -- Saying, "We can and should do more to help today's and tomorrow's students," Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today released a package of education savings incentives and other education related tax proposals.
The legislation provides tax incentives for families and students to save for elementary, secondary, and higher education. In addition, millions of workers who are taking education courses while working are benefitted. Finally, the tax-exempt bond rules are modified to provide incentives for the construction of public schools.
"This proposal is a down payment on education assistance for our nation's students and their families. These provisions can help make education more affordable and accessible for more students, and can also help communities build better schools. I view this as a first, but important step in assisting today's and tomorrow's students," Roth stated.
The proposal or Chairman's Mark, which will be taken up Wednesday by the Committee, includes the following provisions:
Tax Incentives for Education Savings:
• Raises the contribution amount of the education IRAs from $500 to $2000 per year and permits withdrawals for K-12 expenses.
• Allows tax-free distributions from state-sponsored and private prepaid college tuition plans.
• Extends the tax-free treatment of employer-provided educational assistance for undergraduates from June 1, 2000 through December 31, 2003 and for graduate students from January 1, 2000 through December 31, 2003.
• Eliminates the 60 month limitation on the deductibility of student loan interest.
• Provides a package of tax incentives, under the tax-exempt bond rules, for construction of elementary and secondary public schools.
The package is offset by revenue raising proposals, many of which have been previously been approved by the Finance Committee.
The Joint Committee on Taxation description is available for news organizations in Dirksen 219. The document will also be available on the Finance Committee website later today at www.senate.gov/~finance. It is too long to be faxed.
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