AS TAX DEADLINE APPROACHES SCHUMER REMINDS NEW YORK'S FAMILIES TO TAKE ADVANTAGE OF HIS COLLEGE TUITION TAX CREDIT, WILL SAVE MIDDLE CLASS FAMILIES THOUSANDS OF DOLLARS THIS YEAR
Schumer's College Tuition Tax Credit Was Passed as a Part of the Economic Recovery Act
Schumer Fought for Provision to Provide Middle-Class Families With a $2,500 Credit Per Student
Credit Is New Approach & Major Change - For Every $1 Spent on College Tuition, Middle Class Families Could Get $1 Off on Taxes, Up to $2,500 A Year
Today, U.S. Senator Charles E. Schumer urged New York's families to take advantage of his College Tuition Tax Credit that was included in the federal economic stimulus package when they file their tax returns this year. Schumer's law included a provision to more than double the current college tuition tax break to $2,500 per student per year. The credit is a new approach and a major change to the current college tuition tax deduction that will allow many middle class families in New York to deduct dollarfordollar the money they spend on tuition up to $2,500 per student per year. Schumer lobbied hard in the Senate to get the new middleclass tuition tax credit signed it to law and is eager to see all eligible New York families take advantage of it. Schumer said that the savings from this tax credit is needed now more than ever as the economic downturn takes its toll on middle class families and tuition costs skyrocket.
"By taking advantage of this tax credit middleclass families in New York can save thousands of dollars," Schumer said. "A college education is a necessity for America's children and it is being priced as a luxury item. Now, we have a new approach that provides middle class families with one dollar off their taxes for every dollar spent on college tuition. It's import that families in New York take advantage of this opportunity."
Schumer's legislation combined the HOPE credit and the college tuition deduction into a $2,500 credit that is in effect for the next two years. For families currently taking the deduction, this new law represents an overall benefit that is at least twoandahalf times greater than the tax deduction available under the old law. For some families, the increase in the benefit that they can take advantage of this tax season will be even greater. For instance, a family could claim Schumer's new credit for up to three children in any given year. For families with children in college but who do not have enough income tax liability to qualify for the credit, the law provides a refund worth up to 30 percent of the credit for each student. Below is a regional breakdown of how much each region of the state will receive if everyone eligible for this tax credit files for it on their 2010 income tax returns:
· In the Capital Region, middle class families will save $198,155,000 on college tuition.
· In Western New York, middle class families will save $203,295,000 on college tuition.
· In Central New York, middle class families will save $185,702,500 on college tuition.
· In the RochesterFinger Lakes Region, middle class families will save $191,722,500 on college tuition.
· In the Southern Tier, middle class families will save $169,275,000 on college tuition.
· In the North Country, middle class families will save $86,277,500 on college tuition.
· In the Hudson Valley, middle class families will save $234,427,500 on college tuition.
In the last decade, college tuition has skyrocketed across the country in light of rising costs. With the recent tightening in the student loan credit market, more students of all income levels are being forced into borrowing from both federal and private lenders to finance college and they are borrowing in higher amounts than ever before. Others are forced to make tough decisions about whether or not higher education is feasible. According to the federal Advisory Committee on Student Financial Assistance, cost factors prevent 48 percent of collegequalified high school graduates from attending a fouryear institution and 22 percent from attending any college at all.
The Schumer bill that was signed into law combined the HOPE and Lifetime Learning credits and the abovetheline tuition tax deduction into one credit of up to $4,000 per student. For middle class families currently taking the HOPE credit, making less than $60,000, the new credit more than doubles the existing tax benefit. If these families currently use the college tuition deduction, the maximum tax benefit could be quadrupled or more, depending on a family's circumstances and tuition costs. This tax season the credit will help the millions of middle class families across the country. Schumer's law was written in such a way so that even students with modest tuition-such as those attending a community college-still receive a sizeable credit. The lifetime benefit per student is set at $16,000, and it can be used for college or graduate school. The new credit also includes expenses for tuition, fees, and textbooks and can be used for up to three students per household. Up to 50 percent of the cost of textbooks, up to $400, can be claimed as part of the $4,000 credit each year.