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Wednesday, September 22, 2010

Education Tax Benefits: Are They Permanent or Temporary?

Linda Levine
Specialist in Labor Economics

Federal income tax benefits available to individuals to mitigate escalating costs associated with postsecondary education have multiplied within the past decade. Some of these benefits are authorized temporarily (e.g., the Higher Education Deduction), while others are authorized permanently (e.g., the Hope Scholarship Credit, Lifetime Learning Credit, Coverdell Education Savings Account, and Section 529 Program). But complicating this distinction has been the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16), in which Congress enhanced temporarily aspects of permanent education tax benefits and authorized temporarily the Higher Education Deduction. More recently, the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) amended the permanent Hope Scholarship Credit by authorizing temporarily the American Opportunity Tax Credit, and the 529 Program by extending temporarily its qualified expenses. This report very briefly describes the postsecondary education tax benefits available to individuals and highlights their temporary-versus-permanent features.

Date of Report: September 8, 2010
Number of Pages: 8
Order Number: RS21870
Price: $19.95

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