Monday, November 27, 2017

Federal Legislative Report 115-06

TAX REFORM
On November 16, the U.S. House of Representatives voted to approve its version of tax reform, H.R. 1, the Tax Cuts and Jobs Act, along party lines. It is anticipated that the U.S. Senate will vote on its version beginning this Wednesday, November 29. The following are provisions, applicable to education, included in the House version:
  • Limits State and Local Tax Deductibility (SALT) deductions for taxpayers to property tax deductions up to $10,000.
  • Expands Coverdell education savings accounts to allow contributions of up to $10,000 to private schools, thereby providing a tax-advantaged investment account for private school tuition.
  • Terminates advanced refunding that allows districts/communities to refinance bonds at lower interest rates, as well as private activity bonds and tax credit bonds used by school districts (Qualified Zone Academy Bonds, Qualified Energy Conservation Bonds, and Clean Renewable Energy Bonds).
  • Eliminates the $250 tax deduction for teachers who use their own funds to augment instructional materials and classroom supplies for students.
The following are provisions, applicable to education, included in the Senate version:
  • Would repeal SALT deductions altogether.
  • Would terminate advance refunding and does not address tax credit bonds or private activity bonds.
  • Would double the $250 tax deduction, to $500, for teachers who use their own funds to augment instructional materials and classroom supplies for students.