Christian Education and Tax Reform
December 6, 2017
Congress has taken major action on tax reform this week, and we are asking that you join us in communicating to our legislators and the President our support for four provisions of the current tax reform bill:
- Supporting the ability of parents to save for their child’s K–12 education
- Preserving tax-free tuition to the children of teachers and staff
- Allowing schools to provide tax-free educational assistance to staff
- Doubling teacher deductions for classroom expenses
You can find more information on these issues at acsi.org. Visit ACSI’s Legal Legislative Action Center to find prepared messages that you can use to contact your Members of Congress. Please urge other families to do likewise; it is vitally important for the Christian school community to speak up at this time.
Quick Action Steps
1. Please contact your legislators and urge them to protect Christian schools and teachers in the tax reform bill.
The U.S. Senate passed its version of the Tax Cuts and Jobs Act in the early hours of Saturday morning, December 2. The House passed its bill November 16. The two chambers must reconcile their bills in conference committee, a process that begins this week. We want to notify all of our legislators to urge the conference committee to keep the following four provisions in the final bill:
1. The final bill should retain the Senate’s expansion of 529 Savings Accounts. Both the House and Senate now allow savings for elementary and secondary school expenses in 529 Savings Accounts, though the Senate’s language is broader. Expansion of 529 accounts will help parents save for their children’s education during their K–12 years as well as for college.
2. The final bill should preserve Sec. 117(d) as provided in the Senate bill. This section of the Internal Revenue Code allows schools to provide tax-free tuition to the children of teachers and other staff. This is an important benefit for teachers who often already make sacrifices for the greater good. The benefit also helps schools recruit quality staff. Regrettably, the House version taxes this benefit as income. Christian high school tuition averages $9,000 per child. If the House prevails, a teacher who receives the benefit will be taxed on $9,000 of additional income per child and the school will face additional employer payroll taxes for every teacher/staff member who receives the benefit.
3. The final bill should retain Sec. 127(a) as provided in the Senate bill. This section allows schools to provide employees up to $5,250 per year tax-free in educational assistance. This is a valuable tool for schools to recruit high-quality teaching and other staff. If the House version prevails, this benefit will be taxable as income.
4. The final bill should preserve the Senate version’s doubling of the teacher deduction for classroom expenses to $500. Doubling the deduction will be a great help to educators. The House bill eliminates the current $250 deduction for teacher classroom expenses altogether.