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Letter to the House Ways and Means and Senate Finance Committees Regarding the Taxability of Scholarships and Grants Under the Tax Cuts and Jobs Act

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Letter to the House Ways and Means and Senate Finance Committees Regarding the Taxability of Scholarships and Grants Under the Tax Cuts and Jobs Act

May 17, 2019

​ACE President Ted Mitchell sent a letter May 9 to members of the House Ways and Means and Senate Finance Committees, urging them to swiftly correct a mistake made in the Tax Cuts and Jobs Act (TCJA) of 2017 that has inadvertently caused harm to many low- and middle-income students who rely on scholarship aid to pay for their college education.

The letter notes that the TCJA made changes to the so-called “kiddie tax” that sharply increased the tax levied on the portion of scholarships set aside for expenses such as room and board that colleges and universities award to students from families of little or modest means. The result is that many low- and middle-income students are being taxed at the same rates as wealthy individuals.

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