ACE, Other Groups Urge Congress to Extend Tuition Deduction, Repeal Parking Tax
Published: June 19, 2019

​ACE and five other higher education associations sent a letter​ today to House Ways and Means Committee leaders urging support for extending the tuition deduction and repealing the so-called parking tax in two bills scheduled for committee markup Thursday.

The extension of the above-the-line deduction for qualified tuition and related expenses is included in the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301), while the repeal of the unrelated business income tax (UBIT) qualified transportation benefit tax—known as the parking tax—is included in the Economic Mobility Act of 2019​ (H.R. 3300). 

As ACE President Ted Mitchell explains in the letter, the tuition deduction, which expired at the end of 2017, helps reduce the cost of college by allowing students or their parents to deduct up to $4,000 in eligible higher education expenses from their taxable income. 

“The tuition deduction is particularly important to graduate students, who are ineligible for the American Opportunity Tax Credit,” he wrote. “Regrettably, its expiration last year means many students and families lost a valuable benefit that helps them finance a college education.”

The good news is that the extension of the tuition deduction in H.R. 3301 would be retroactive to the 2018 tax year, so students and parents could recoup the taxes levied for last year.

Meanwhile, the 2017 tax reform bill unwisely included a provision imposing a 21-percent UBIT on the expenses that tax-exempt nonprofits, including colleges and universities, incur for providing transportation benefits to their employees such as parking and transit passes. 

“This misguided tax should be repealed as it imposes significant new costs and administrative burdens on colleges and universities, which will harm students and families by driving up the cost of college,” Mitchell wrote. 

The repeal of the parking tax included in H.R. 3300 also would be retroactive.  

The letter urges Congress to act swiftly to both extend the tuition deduction and repeal the parking tax.