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Tax Extenders Included in Financial Bailout; Cell Phones Not Addressed

October 9, 2008

Last month’s financial bailout legislation included tax provisions worth more than $150 billion.  The Emergency Economic Stabilization Act of 2008 (H.R. 1424), signed by President Bush on October 3, provides  a one-year patch of the alternative minimum tax and $17 billion in tax incentives for investments in renewable energy. Of special interest to colleges and universities, H.R. 1424 also extends the following  tax provisions for two years, through December 31, 2009: 

  • IRA Rollovers. The Pension Protection Act of 2006 (PPA) created a provision allowing taxpayers to make tax-free contributions from their IRA plans to qualified charitable organizations. The proposal is effective for distributions after December 31, 2007.
  • Qualified Tuition Deduction. The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) created an above-the-line tax deduction for qualified higher education expenses. The maximum deduction is $4,000 for taxpayers with AGI of $65,000 or less ($130,000 for joint returns) or $2,000 for taxpayers with AGI of $80,000 or less ($160,000 for joint returns).

Although  colleges and universities had hoped that the tax provisions would also simplify  the treatment of employer-provided cell phones, the new law did not address the issue. NACUBO will continue to push for legislative action on this issue in the next Congress.

Summary of Tax Provisions in H.R. 1424

Legislative Text of Tax Provisions in H.R. 1424