On July 24, the House, by a vote of 227 to 187, passed H.R.3393, the “Student and Family Tax Simplification Act.” For tax years beginning after Dec. 31, 2014, the Student and Family Tax Simplification Act would permanently replace the Hope credit with a modified version of the American Opportunity tax credit, and repeal both the Lifetime Learning credit and the now-expired deduction for qualified tuition expenses.

The credit rate would be 100% on the first $2,000 of qualified tuition and related expenses, and 25% on the next $2,000 of qualified tuition and related expenses, for a maximum credit of $2,500, with the credit for the first $1,500 of qualified tuition and related expenses being refundable.

The credit would be available for up to four years of post-secondary education at qualifying four-year universities, community colleges, and trade and vocational schools. It would begin to phase out for families with incomes between $86,000 and $126,000 (half those amounts for single individuals) to ensure that the credit provides greater benefit and value to low- and middle-income families.

If you need any questions regarding this or any other education issues contact Holbrook & Manter.  Our professionals are ready to assist you!!